NM House Passes Medical Malpractice Reform Bill – HB 99

The New Mexico House of Representatives February 14, 2026, passed House Bill 99 (HB 99), legislation aimed at addressing a growing healthcare crisis in the state by reforming medical malpractice laws. The bill, which passed with a vote of 66-3, seeks to balance the need to protect patients who have been harmed by medical negligence with the need to retain physicians and expand access to care, particularly in rural and underserved areas.

Governor Michelle Lujan Grisham has identified HB 99 as a top priority during the final legislative session of her administration. She urged the New Mexico Senate to act swiftly on the bill, emphasizing that it is not a choice between supporting patients and providers, but rather a measure that benefits both. “With this bill, we’re not choosing between patients and providers — we’re choosing both,” Governor Lujan Grisham stated. “HB 99 protects patients who have been harmed by medical malpractice while making it possible for physicians to practice here without fear of bankruptcy.”

Addressing a Healthcare Crisis

New Mexico is facing a significant shortage of healthcare professionals, with a deficit of over 5,000 providers. Critical gaps in care are present in 32 of the state’s 33 counties. A substantial percentage of physicians currently practicing in New Mexico – over 65% – are reportedly considering leaving the state, with concerns over punitive damages and the high cost of medical malpractice insurance cited as primary drivers. Notably, New Mexico is the only state in the nation to have experienced a net loss of physicians over the past five years, a trend many healthcare professionals attribute to the financial burdens associated with practicing medicine in the state.

Key Provisions of HB 99

HB 99 introduces tiered caps on punitive damages awarded in medical malpractice cases. These caps are scaled based on the size and type of medical practice or facility. Independent providers and clinics would face a cap of approximately $1 million, locally owned hospitals $6 million, and larger hospital systems $15 million. These caps are designed to adjust annually to account for inflation, ensuring their continued relevance over time.

Beyond damage caps, the legislation also raises the evidentiary standard required to pursue punitive damages. Currently, plaintiffs must demonstrate negligence to recover compensation for harm. HB 99 requires a “clear and convincing” standard of evidence for punitive damages, a higher threshold than the current standard. The bill mandates judicial review before punitive damage claims can proceed to trial, adding another layer of scrutiny to these types of cases.

Negotiations and Support for the Bill

The passage of HB 99 follows weeks of negotiations convened by Governor Lujan Grisham, bringing together representatives from trial lawyers, lawmakers, and hospital executives. This collaborative effort resulted in a compromise that garnered unanimous approval from the House Judiciary Committee. The bill has also received endorsements from both House Democratic and Republican leadership, as well as the New Mexico Hospital Association, demonstrating broad bipartisan support.

The Role of Punitive Damages

Punitive damages are awarded in civil cases not to compensate the plaintiff for losses, but to punish the defendant for particularly egregious or reckless conduct. In medical malpractice cases, punitive damages are typically reserved for instances where a healthcare provider’s actions demonstrate a conscious disregard for patient safety. The debate surrounding punitive damages often centers on whether they serve as a deterrent to misconduct or contribute to defensive medicine – where providers order unnecessary tests and procedures to avoid potential lawsuits.

Proponents of HB 99 argue that unlimited punitive damages create an environment that is hostile to physicians, driving up malpractice insurance premiums and discouraging doctors from practicing in New Mexico. They contend that the caps established by the bill will help stabilize the insurance market and encourage more physicians to remain in or relocate to the state. Opponents, however, express concern that the caps may limit the ability of patients to receive full compensation for serious harm caused by medical negligence.

Next Steps and Potential Impact

With its passage in the House, HB 99 now moves to the New Mexico Senate for consideration. Given the limited time remaining in the 30-day legislative session – which concludes at noon on Thursday – Governor Lujan Grisham has urged the Senate to prioritize the bill and act without delay.

If enacted, HB 99 is expected to have a significant impact on the healthcare landscape in New Mexico. By addressing concerns about medical malpractice liability, the bill aims to attract and retain physicians, improve access to care, and ultimately enhance the health and well-being of New Mexicans. The legislation represents a concerted effort to address a critical challenge facing the state’s healthcare system and ensure that residents have access to the medical care they need.