Featured topic and speakers
On March 6, New Mexico Governor Michelle Lujan Grisham signed HB 99, a major medical liability reform bill that will help reduce the cost of medical liability insurance and attract more physicians to New Mexico. The new law modernizes New Mexico’s medical liability framework to reduce the cost of medical liability insurance and attract more doctors to a state that has long been underserved.
In this video interview with then-AMA President Bobby Mukkamala, MD, Governor Lujan Grisham discusses why she made medical liability reform a priority and how HB 99 addresses some of the challenges facing New Mexico physicians.
Speakers
- Michelle Lujan Grisham, governor, New Mexico
- Bobby Mukkamala, MD, immediate past president, AMA
Transcript
Dr. Mukkamala: Hi. I'm Dr. Bobby Mukkamala, president of the American Medical Association. And I'm here with the Governor of New Mexico, Michelle Lujan Grisham, to talk about the state's new medical liability reform.
Gov. Lujan Grisham: I'm delighted to be on your show, and I'm also really impressed with the information you're providing to practitioners, and frankly, to the public, so thank you.
Dr. Mukkamala: No, thank you. It's nice to be on your team on something so important to our healthcare system. So medical liability reform is rarely easy politically to get to, but you decided to make it a priority for your last term. Why was that? What did you notice?
Gov. Lujan Grisham: Well, a couple of things. We did some tweaking of med mal in the state two years before because we didn't have any liability insurance carriers who were willing to actually sell insurance here. So you've got one carrier. You've got a monopoly. I have thousands of doctors who are leaving the state. Another two-thirds said they were going to leave the state. And the data was really clear, that we were outliers. We were paying more than twice the national averages for medical malpractice insurance.
And with the ability to get stackable punitives on stackable occurrences was creating personal liabilities for physicians and practices that are unfair and untenable. And it was completely adjusted in the wrong direction. It wasn't protecting patients anymore for gross neglect or making them whole. It was pushing practitioners out of the state, forcing them to close their practices. So it was really an emergency, and this was the last effort. And I made it clear that I would call a special session every day for an entire year until we got it over the finish line.
Dr. Mukkamala: Yeah. And it's something that—I mean, thanks for sharing what you've noticed, because—tell us a little bit more about the impact that medical liability pressures were having on the physicians in your state. I mean, we see it. And for you to see that so close, what did you notice about physicians and what they were dealing with?
Gov. Lujan Grisham: I mean, there were really three things. There was the financial toll where you're not expanding your practice, because you can't. Any room to do that—which we need. We need independent practices. And quite frankly, even for hospitals, and even for corporate, large hospital practices, if they're making decisions that minimize expanding coverage when 32 out of 33 total counties in New Mexico are grossly underserved by having enough medical professionals available to the residents of the state, we've got a real problem.
Two, I can't do economic development because the first question they asked me is whether or not they're going to have sufficient medical care. And three, we know that in a state that has, for hundreds of years, had a higher than national average poverty rate, which then trends in to a higher than national average chronic care or related healthcare negative outcomes and issues, then I have to have more healthcare penetration and more access points so that I can do more on prevention and health promotion.
So I have the perfect storm for creating more problems in a state, not less, unless I dealt with the number 1 reason you can't hold or retain or move additional practitioners into the state. And it was, in fact, med mal.
So the medical society did studies. Our Legislative Finance Committee did studies. The state was doing studies. And it was clear it was the number 1 issue. And you could look at the other states, including our neighboring states, and see what their medical malpractice systems looked like. And ours was completely unfairly biased towards plaintiff's lawyers and away from a fair situation for practitioners. So it required an overhaul.
And the issue really is that there isn't anyone, including me—if you have gross neglect, a patient does need to be made whole. And healthcare is expensive. So when you look at the lifetime medicals that someone might need, I do think that we need to adjust that in some way.
But somehow this translated into, who is making more money in the state, physicians or lawyers? And the patients' issues or the state's issues were completely lost in an emotional debate that had gotten really ugly, in my opinion, in our state.
So the goal for me was to take experts in healthcare, of which we have many, including the AMA, to talk about what the national stats are and aren't, and to help New Mexico put together a fair system that protects patients, but doesn't unduly burden and make it unfair—impossible, in fact—to hold coverage, to expand your practice, and to stay fairly in a state like New Mexico.
And that's what we accomplished. And when we get there, I think really understanding what we had to do to our malpractice laws, and to also understand that a great deal of our legislators—because we're the only unpaid legislative system in America. Many of our legislators are trial lawyers, because they're the only folks who can be in the legislature and take the kind of time off to be a legislator that you need away from work. So it was really an uphill battle. And I'm proud of every New Mexican, including the trial lawyers, who actually voted for passage of the bill in the end.
Dr. Mukkamala: Yeah, it's wonderful. And can you give us a brief overview of this HB 99? And how does it address some of these challenges?
Gov. Lujan Grisham: You got it. So that's the name of the bill, House Bill 99. It started in the House. I mean, our big hurdle was actually in the Senate where Senate Judiciary should be a tough place. Their job is to be deliberative about changing laws or adding new ones. But here, they had signaled that they weren't interested in fixing, because they didn't think it needed a fix for med mal. So this was going to be tricky.
Here are the issues, and here's what the bill does. Number 1, New Mexico had, frankly, really high caps, and we had what we called stackable occurrences. That means that if you had one incident, we could stack all of the touches by all of the different personnel and have an independent case against the hospital, the anesthesiologist, the nurse, the physician, the hospital tech. And if the incident occurred in surgery and there was an infection later tied to that incident, you could then stack the infection.
So what you created was nine cases out of one. And each of those nine cases could hit a limit or beyond, so you were stacking these punitives. So a case that legitimately would be $6 million turned into $50 to $100 million. And as you might imagine, that created huge insurance coverage problems for insurance companies and for practitioners.
Number 2, we also paid for what the medical loss ratios are. And that's in the weeds a bit, but doctors get it, which is we play this game in America, which we need to stop doing. So when you get a bill, it shows what the hospital bill or the practice bill is. Then it shows you what your insurance company will pay, and that becomes the standard payment. And then there's the co-pay by the patient or individual. And there's always this gap.
Well, in New Mexico, we were paying whatever an insurance company was billing, and then we were tripling what that was. No state in America pays the medical loss ratio, and it just incentivize insurance companies to artificially inflate that number. And again, who's responsible? The practice, right? Or a small independent insurance company. So that gets out of whack.
We did not fix this. But another problem in New Mexico that I hope everyone keeps their eye on is that you can venue shop here. What that means is you go to very friendly juries who may be the poorest communities that have seen their neighbors struggle.
And maybe without thinking about the damage or the harm to a patient, they overwhelmingly side against a hospital, what they think is an insurance company, a big business in favor of an individual. And it artificially then changes the way in which we fairly address what the liability is or isn't, right? Because we're attacking corporate America. This also makes no sense, and this venue shopping has to end.
The reason it got in the bills to begin with, or the laws, is because people felt like if a hospital in a small community has all of the employees of that community, you might not get a fair review by a jury. Well, then make that case on the front end, because I think that it creates the ability to have frivolous lawsuits anywhere in the state. And that did get addressed. So you have to go before a panel or a board so that we're minimizing frivolous lawsuits.
And then last, we had a very low burden of proof. So what that did is it just meant insurance companies were settling. You could not win. It was not a fair trial. Now we've changed that to be a higher burden of proof, which means that you have a fairer trial on the front end, thereby eliminating this sort of frivolous lawsuit environment.
We believe that now our law is in line with most of the medical malpractice laws in the country, which means that we're protecting both practitioners and patients so that it's a fair system for both. And it also maximizes the opportunity that no system is perfect. We don't want to vilify healthcare practitioners for mistakes. And again, we don't want to punish patients if there's been a real harm that needs to be addressed. We think this does all of those things and feel really good about it.
Last in the weeds thing. New Mexico also has a system where we have a patient compensation fund. So we really try to manage—everybody puts money in, practitioners and hospitals, so that we minimize what those costs are to insurance companies and to individual providers. And so we think that altogether makes this now one of the better states to practice and minimize unfair costs related to malpractice coverage.
Dr. Mukkamala: Absolutely. And—
Gov. Lujan Grisham: It's a lot.
Dr. Mukkamala: Yeah, it is. It's amazing work that you've done, and we're so appreciative for all physicians in the country, because we use each state that does something amazing like this as an example of how we improve our ability to take care of patients. So now that this bill is passed, what's the long-term impact you're hoping to see for that next generation of physicians coming in?
Gov. Lujan Grisham: Well, the most important really is that physicians believe that it's fair to practice here, that we aren't going to make it so impossible that it's cost-prohibitive. But also, it's personal if we are so litigious and that that's the focus. Who would want to practice in that environment? So number 1, we've increased stability, protection, security for every class of healthcare provider.
Two, insurance rates should come down. And if they don't, then we go after the insurance companies. And "after" was a poor choice of words. We're not trying to create hostility. We're trying to create fairness. But if those don't come down in line with our bordering states and states that have similar laws, then there's something wrong here, so we'll be able to keep our eye on that. But we fully expect and did get good testimony from insurance carriers like Doctors insurance that these rates will come down and be more in line with these national averages.
And then third, we hope that we can really now put that to bed and talk to practitioners about all the other benefits to practicing here. We have the best loan forgiveness program in America. We've increased it by 3,500%. And for physicians over a number of years, we're paying more than $300,000 towards your med school loans.
Two, we're moving towards endowing medical school. Three, we're building a new medical school. Four, we have the second highest Medicaid rates, 150% of Medicare in the country. Five, we have the most robust rural healthcare delivery investment where we do actual bricks and mortar, and we invest in the cost of the practice, minimizing losses over a certain period of time so that, in fact, you can expand with some level of security.
We have robust telehealth. We're building, like I said, clinics, bricks and mortar, and new hospitals, and this new medical school, and state-of-the-art assisted living and long-term care facilities. We removed co-pays for behavioral health. We have a Medicaid trust fund. We have a behavioral health trust fund.
And maybe last—and I can't even count the number of opportunities—second to last is we also cover and subsidize people's insurance. So, 122,000 New Mexicans, unlike anywhere else in the country, there's subsidies because they were taken away by the feds in the Affordable Care Act. We cover you in New Mexico.
And most importantly, you're free to practice here. We aren't interfering with the doctor-patient relationship here. I can't think of a better place right now. We talked about that too. No pre-offs, working on PBMs. I mean, we want this to be provider-friendly.
And maybe there is another one. And we're signing all of the medical compacts. So we did the physician compact. We did social work compact. This next 60-day session, I suspect another six compacts get signed into law. So we are really working to be the number 1 place in America to practice medicine and deliver healthcare.
Dr. Mukkamala: That's amazing. I'm in Michigan. I've never been as tempted as I am right now to come and be a physician in New Mexico. But—
Gov. Lujan Grisham: Do it. In Santa Fe, number 1 tourist spot in America. And we're building affordable housing, and we have free college. And we've added thousands—I'll give you two more—thousands of healthcare practitioners into the mix, because we pay fully two-year, four-year, full-time, part-time, anywhere, anytime college.
Universal free childcare for families, universal free pre-K. It's one of the top pre-K systems in America. We're now having better outcomes in literacy than Mississippi, so it'll be the Mississippi and New Mexico miracles. I mean, we're really leaning in to an anti-poverty program and for child well-being. The most stunning drop in childcare poverty in America is in New Mexico. We went from 50th to 23rd, and we think the data, now after universal child care, will put us in the teens.
And these are things that show the strength and resiliency of a state that recognizes it has challenges, and the best way to address them is go big. Do not nibble around the edges. Embrace those and deal with them, which is what we did with medical malpractice.
Significant problem, a barrier to having healthcare practitioners. And now we've removed that barrier and feel really good about creating the climate that was always intended to be here. Patients are protected, and so are healthcare practitioners. That's the way it should work.
Dr. Mukkamala: I agree 100%. So the New Mexico Medical Society and the AMA were big proponents of this bill from the beginning. So how did that support help to get it passed? And what role did they play in helping policymakers just to understand what was already happening on the ground?
Gov. Lujan Grisham: Well, first I'm going to be a little negative, and I want you to forgive me. When things are so dire and physicians have—I mean, they want to be here. You made a choice to come here, go to school here and stay here, and then you can't. It's very personal. And they're leaving the state. And for lawyers that has seen maybe the worst situation with a particular patient or set of outcomes, this battle was so personal that it got too negative in the context of legislative work.
So part of our problem for a couple of years is that personal aspect got so angry in a legislative session, it just didn't move right out of committees because it was just too angry. I blame all of us for that.
But here's what was stunning about the AMA and the New Mexico Medical Society. They identified a new strategy over this last year. They helped the state put together a fact-based healthcare summit so that we could stop fighting over some of the facts, but stipulate, here's why we're an outlier. Here's what's in the law that nobody else is doing that's creating problems.
Here's what we should be keeping so that we know we're protecting patients. All of these things. Better quality outcomes, better payments for quality outcomes in healthcare through Medicaid, really thinking about that. We invested a billion and a half in healthcare payments through a tax program leveraging Medicaid, really looking at where some of the problems are so that we don't pay practitioners enough, and we're just creating this very fragile system. That made a big difference, because now we're educating the public. We're educating lawmakers.
And then the Medical Society joined forces, and so did the AMA, with local advocacy groups like Think New Mexico and Indivisible. These are everyday New Mexicans who are struggling to get to a doctor. Some primary care folks or practices can't see people for a year.
It was this effort that made it so real to lawmakers about what was at stake. It really moved the needle, and it put me in a position to just do that leverage. You have 30 days. You've had a year. This should be the number 1 priority out of the session. You've got to get it done. And if you don't get it done in this bill, in this way, I won't sign it.
And I'm also going to give the state a lot of credit here. My general counsel, her name is Holly Agajanian. She was instrumental in making sure both sides had as their overarching aspect here what we agreed to in that healthcare summit in terms of the basics that had to get done. So she kept this train on the tracks, if you will. And if she hadn't, I'm not sure we could have gotten a bill through that I could have signed.
Dr. Mukkamala: No, that's amazing. And—
Gov. Lujan Grisham: It was good—it was good work by everyone. And now New Mexicans are really educated about the fragility of healthcare systems. And that's going to serve us well in the future in my opinion, and creates a whole host of additional opportunities for the next administration to improve healthcare delivery systems in New Mexico.
Dr. Mukkamala: For sure. This is a major component, but there's more work to be done. So do you have a final message for physicians across New Mexico about this bill or anything else that you want them to hear?
Gov. Lujan Grisham: I do. Don't take my word for it. There are a ton of healthcare practitioners that are going to tell you right now, they're expanding, that they're receiving rural healthcare care delivery grants, that they're doing loan forgiveness, that they're able to recruit, that they feel safe and secure and respected in the state of New Mexico, that while the feds and other states are minimizing those freedoms to practice and those investments in stable practices, New Mexico's leaning in the other way.
And just like all of America's infrastructure, we stopped building laboratories and hospitals and research spaces and practices and clinics. And we have got to get back to—we have the number 1 healthcare system in the world because we train and have the best health practitioners in the world. What we don't have is a system that works for families, patients, and providers.
And this is a place where New Mexico can be a beacon of light. There's a lot more work to do, and a lot more work to do with the feds. But this is a place where the AMA has always shined, by bringing the public to a greater understanding of the challenges of protecting a patient and physician or practitioner relationship.
Patients get better when they have access to someone they trust, but we keep minimizing that. And so, I hope that New Mexico's story and the AMA's work here is more about—there's a lot more work to be done, and we're better together than we are separated. And you have a lot that you can accomplish and are accomplishing. And New Mexico's better for it, and we thank you.
Dr. Mukkamala: Absolutely. No, thank you so much, Governor. This was amazing. And your legacy as it relates to healthcare in New Mexico, and your influence with exactly what you mentioned here on the healthcare of this country, will be amazing. So, thank you so much, Governor Michelle Lujan Grisham, for amazing work that you've done. And thank you for that legacy.
Gov. Lujan Grisham: All right. I'm going to come find you in Michigan and recruit you right over here.
Dr. Mukkamala: Sounds great. Sounds great.
Disclaimer: The viewpoints expressed in this video are those of the participants and/or do not necessarily reflect the views and policies of the AMA.
