Union County General Hospital CEO Tammie Chavez was in the final stage of hiring a urologist last year — a desperately needed specialist in an aging county of fewer than 4,000 residents with no other local options for care.
Then, at the last minute, she got the news.
The urologist, who was ready to relocate from Amarillo to the northeastern New Mexico town of Clayton, had spoken to his attorney. The advice he got: Don’t do it. New Mexico is too dangerous a place to practice medicine. The urologist could not risk working in a state that leads the country in medical malpractice litigation, he told Chavez.
Now, patients in Clayton must travel hours for care in Texas or Albuquerque.
Months earlier, a similar scenario played out at another county-owned hospital on the other end of the state. Roosevelt General Hospital in Portales, which serves Roosevelt County’s nearly 19,000 residents, had recruited two urologists from Texas and Colorado. Both walked away during the hiring process, citing malpractice risk as the reason — leaving another swath of rural New Mexico without urology care.
“I’ve had a few people that were interested, and then once they check into New Mexico, all of a sudden they back out and they’re not interested anymore,” said Kaye Green, CEO of Roosevelt General.
The hospital has struggled to bring in a cardiologist, general surgeon and primary care physician, Green said. And last year, the Texas-based radiology group the hospital had partnered with terminated their contract, due in part to New Mexico’s malpractice problem.
“We desperately need doctors here, but they are terrified to come because of the malpractice risk,” Green said. “This is a crisis.”
Across New Mexico, rural hospitals are contending with unsustainable increases in medical malpractice insurance premiums that continue to rise year after year, even as they struggle to recruit and retain doctors who fear being sued for malpractice. Costs at rural hospitals have risen nearly 160% since 2020, according to data compiled by the New Mexico Hospital Association. Urban hospitals saw an increase of over 330% during the same period.
Left unchecked, these costs could put both hospitals out of business.
In Portales, Roosevelt General’s most recent premium reached $1.4 million, more than double the cost of last year’s policy.
In Clayton, those costs have topped $1 million, a sevenfold increase from the $142,565 premium the hospital had paid previously. To stay insured and keep the hospital’s lights on, Chavez has had to close at least one medical program and finance part of the insurance cost at interest.
These rural, county-owned hospitals should be comparatively low-risk for insurers. In contrast to many of their large urban counterparts, the state Tort Claims Act places relatively conservative caps on their payouts for lawsuits. Yet their premiums continue to rise year after year, putting unprecedented strain on their budgets.
“Heart attacks will not make it to the next town if we’re not here,” Chavez said. “Stroke victims won’t make it. Trauma victims won’t make it. I don’t know how to put it any more bluntly: Without this hospital, people will die.”
A September 2025 report compiled by the Medical Professional Liability Association, an insurance trade group, found that New Mexico has 50% more paid claims per capita than any neighboring state — a figure that has continued to rise significantly in New Mexico even as Arizona, Utah, Colorado and Texas saw an average 25% drop in paid claims.
A report by the state Legislative Finance Committee found that two-thirds of New Mexico’s doctors are considering leaving the state, largely because of concerns over high payouts from malpractice suits. Wait times for appointments continue to grow as providers grapple with doctor departures and vacant positions at hospitals across the state. Patients seeking dermatology care at University of New Mexico Hospital, for example, now face a record-setting wait of up to a year and a half.
A critical session
Lawmakers are entering the short 2026 legislative session with little room for error.
Some have already introduced legislation to address the health care crisis. Rep. Christine Chandler, D-Los Alamos, introduced House Bill 99, which would make several changes to New Mexico’s malpractice law including placing a cap on payouts for so-called “punitive damages,” which are meant to punish physicians in rare cases of malicious conduct or intentional harm. Sen. Martin Hickey, D-Albuquerque, is pushing a separate bill that will focus on addressing punitive damages.
“We’ve got to get this right,” Hickey said in an interview. “If we don’t pass anything, we will have just solidified that this state will continue to be dangerous” for doctors and patients.
The issue of punitive damages has become a focal point in the debate over malpractice reform. Suits seeking punitive damages are routine in malpractice litigation in New Mexico. One of the state’s largest medical insurers, The Doctor’s Company, saw punitive damages sought in 92% of its clients’ cases in New Mexico since 2017, according to a report by New Mexico In Depth.
Because punitive damages are not subject to caps on payouts, these cases have sometimes resulted in astronomical judgments against health care providers. Insurance analysts have pointed to these judgments as contributing factors in an ever-increasing cycle of rising premiums in New Mexico.
Several recent cases have made headlines:
- In 2024, a suit filed in response to a problematic hernia operation at Rehoboth McKinley Medical Center in Gallup resulted in a $68 million judgment, an amount that pushed the hospital to the brink of bankruptcy.
- That same year, jurors in Albuquerque awarded a patient more than $412 million for unnecessary erectile dysfunction shots administered by a clinic called NuMale Medical Center, setting a national record.
- Last year, a lawsuit against Presbyterian Healthcare Services following an alleged failure to diagnose a newborn’s low blood sugar levels that led to brain damage resulted in a $40 million verdict, including $15 million in punitive damages. A judge later tossed out that verdict and granted a motion for a new trial.
“We’ve had this slew of nuclear verdicts with punitive damages that has put the fear of God in physicians,” said Nick Autio, general counsel for the New Mexico Medical Society. Although not awarded in most malpractice trials, attorneys frequently use the threat of punitive damages to pressure doctors into settling, even in cases the doctors feel they could win, he said.
“A lot of physicians kind of view this session as a last hope” for righting the ship, Autio said, both because the financial pressure on doctors and hospitals has become unsustainable and because malpractice reform has not emerged as a central issue in the upcoming gubernatorial elections.
Gov. Michelle Lujan Grisham has thrown her support behind reforming the state’s malpractice law. In a statement to The Santa Fe New Mexican, a spokesperson for Lujan Grisham said the governor plans to address the issue during the current session, and plans to push specific legislation. If needed, she will call lawmakers back for a special session.
It’s likely to be a fight. Past attempts to reform the state’s malpractice law have been met with stiff resistance from trial lawyers, who say capping punitive damages or limiting attorneys fees would harm patients and make already laborious lawsuit processes even more difficult. Several influential lawmakers on the Senate Judiciary Committee — Sens. Katy Duhigg, Joseph Cervantes and Peter Wirth — are attorneys whose firms take on medical malpractice litigation.
Attorneys across the state have spent significant sums to support a lobbying group, New Mexico Safety Over Profit, which has campaigned extensively against reforming medical malpractice laws. Another group, Patient Protection Project — an organization managed by Albuquerque attorney Lisa Curtis, whose firm employs Duhigg — spent at least $20,000 on social media ads during the 2025 session.
“When we talk about caps for punitive damages, we say no more accountability,” Cid Lopez, an attorney who has worked to oppose proposed changes to the state’s malpractice law, said in an interview.
“Punitive damages serve a very important purpose,” Lopez said. “They keep multibillion-dollar corporations in check. They hold them accountable for things that they do.”
Rather than focus on punitive damages, Lopez said, scrutiny should be placed on insurance companies themselves — especially in light of their ever-increasing premiums for rural hospitals, which already have lower caps on damages and don’t typically have major malpractice claims.
“Why are they raising their rates to such an astronomical level, without any real explanation? Why are they not being further regulated? Why are they not being asked to open their books and say what is justifying these increases?” Lopez asked.
A financial cliff
As malpractice premiums continue skyward, rural hospitals have relied on stopgap bills passed by the state Legislature to keep their lights on.
During New Mexico’s 2024 legislative session, lawmakers changed the state’s formula for Medicaid reimbursement, which resulted in more money flowing to smaller hospitals.
And to offset the rising costs of insurance, Sens. George Muñoz, D-Gallup, and Pat Woods, R-Broadview, successfully introduced a bill to give two years of subsidies to a dozen rural hospitals, including the Union County hospital and Roosevelt General. Those subsidies have now dried up, leaving the hospitals grasping for other revenue streams.
One potentially helpful development occurred last month, when the U.S. Centers for Medicare and Medicaid Services announced New Mexico would receive $211.5 million in federal funding to support health care in rural communities.
But how that money will be spent — and whether it will even reach rural hospitals — is not yet clear.
“Planning and implementation are just beginning, and it is too early to discuss impacts on individual hospitals,” said Marina Piña, director of communications for the New Mexico Healthcare Authority.
However that money is spent, its effect is likely to be minuscule in comparison to upcoming reductions in Medicaid reimbursement rates under the One Big Beautiful Bill Act. Those cuts are expected to have an outsize impact on New Mexico — especially in the state’s rural areas, where a disproportionate number of patients are covered by Medicaid and Medicare.
“The timing is critical for us,” Green said. “We can’t wait another year and pay out another insurance hike. Our patients can’t wait till another session while there are no doctors to treat them.”