HOUSE BILL 316

57th legislature - STATE OF NEW MEXICO - second session, 2026

INTRODUCED BY

D. Wonda Johnson

 

 

 

 

 

AN ACT

RELATING TO HEALTH CARE; ENACTING THE RURAL HOSPITAL MALPRACTICE LIABILITY INSURANCE ACT; CREATING A GRANT THAT RURAL HOSPITALS CAN RECEIVE TO COVER THE COSTS OF MEDICAL MALPRACTICE LIABILITY INSURANCE PREMIUMS; MAKING AN APPROPRIATION; DECLARING AN EMERGENCY.

 

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] SHORT TITLE.--This act may be cited as the "Rural Hospital Malpractice Liability Insurance Act".

     SECTION 2. [NEW MATERIAL] DEFINITIONS.--As used in the Rural Hospital Malpractice Liability Insurance Act:

          A. "department" means the department of health;

          B. "health care underserved area" means a geographic area or practice location in which it has been determined by the department, through the use of indices and other standards set by the department, that sufficient health care services are not being provided;

          C. "premium grant" means money provided to a rural hospital pursuant to the Rural Hospital Malpractice Liability Insurance Act to cover the costs of malpractice liability insurance premiums; and

          D. "rural hospital" means a health care facility licensed by the health care authority as a hospital that is located in a rural or frontier area of the state, including a critical access hospital.

     SECTION 3. [NEW MATERIAL] RURAL HOSPITAL MALPRACTICE LIABILITY INSURANCE TRUST FUND.--

          A. The "rural hospital malpractice liability insurance trust fund" is created as a nonreverting fund in the state treasury. The fund consists of distributions, appropriations, gifts, grants and donations. Income from investment of the fund shall be credited to the fund. Money in the fund shall be expended only as provided in this section.

          B. The state investment officer shall invest money in the fund in accordance with the prudent investor rule as set forth in Chapter 6, Article 8 NMSA 1978 and in consultation with the department.

          C. The state investment officer shall report quarterly to the legislative finance committee and the state investment council on the investments made pursuant to this section. An annual report shall be submitted no later than October 1 of each year to the legislative finance committee, the revenue stabilization and tax policy committee and any other appropriate interim committees.

          D. On July 1, 2027 and each July 1 thereafter, a distribution shall be made from the rural hospital malpractice liability insurance trust fund to the rural hospital malpractice liability insurance program fund in an amount equal to five percent of the average of the year-end market values of the trust fund for the immediately preceding three calendar years. If, on July 1 of a year, the trust fund has been in effect for less than three calendar years, the distribution shall be in an amount equal to five percent of the average of the year-end market values of the trust fund for the immediately preceding number of calendar years that the trust fund has been in effect.

     SECTION 4. [NEW MATERIAL] RURAL HOSPITAL MALPRACTICE LIABILITY INSURANCE PROGRAM FUND.--

          A. The "rural hospital malpractice liability insurance program fund" is created as a nonreverting fund in the state treasury. The fund consists of appropriations, gifts, grants, donations, income from investment of the fund and any other revenue credited to the fund. The department shall administer the fund. Money in the fund is subject to appropriation by the legislature to carry out the provisions of this section. Expenditures shall be by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of health or the secretary's authorized representative.

          B. A rural hospital may apply to the department, in a form and manner prescribed by the department, for a premium grant. To be eligible for a premium grant pursuant to this section, a rural hospital shall:

                (1) demonstrate coverage, or an intent to be covered, by a medical malpractice liability insurance policy approved by the department of health;

                (2) certify that all money granted to the hospital pursuant to this section will be used exclusively for paying malpractice liability insurance policy premiums;

                (3) maintain operations and provide access to essential health care services within a health care underserved area;

                (4) provide documentation required by the department; and

                (5) satisfy any other eligibility requirements established by the department.

     SECTION 5. [NEW MATERIAL] DEPARTMENT DUTIES--REPORTING.--The department shall:

          A. promulgate rules to develop:

                (1) a premium grant application form for rural hospitals to use;

                (2) eligibility criteria for receiving a premium grant; and

                (3) reporting requirements for rural hospitals that receive a premium grant. Reporting requirements shall include the requirement to submit:

                     (a) financial documentation indicating the financial stability of the rural hospital;

                     (b) information on staffing levels at the rural hospital, including efforts to recruit and retain health care providers; and

                     (c) information on the types of services provided and the number of patients served by the rural hospital; and

          B. submit an annual report to the legislative finance committee and the legislative health and human services committee that includes:

                (1) the name of each rural hospital that has received a premium grant;

                (2) the amount of money used to provide premium grants to rural hospitals;

                (3) an update on the cost of medical malpractice liability insurance for rural hospitals; and

                (4) an analysis of the effect that the premium grant has had on each rural hospital's:

                     (a) financial stability;

                     (b) health care workforce; and

                     (c) ability to provide access to health care.

     SECTION 6. APPROPRIATION.--One hundred million dollars ($100,000,000) is appropriated from the general fund to the rural hospital malpractice liability insurance trust fund for expenditure in fiscal year 2026 and subsequent fiscal years to carry out the purposes of the Rural Hospital Malpractice Liability Insurance Act. Any unexpended balance remaining at the end of a fiscal year shall not revert.

     SECTION 7. EMERGENCY.--It is necessary for the public peace, health and safety that this act take effect immediately.

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