Summary:

 Senate Bill176 (SB176) relates to medical malpractice by requiring payments from the Patients Compensation Fund to be made as expenses are incurred and requiring seventy-five percent of the punitive damages awarded in medical malpractice claims to be awarded to the state and limiting attorney fees in malpractice claims. Also, creating the Patient Improvement Fund while making an appropriation.  

Legislation Overview:

 Senate Bill176 (SB176) provides for certain limitations on recovery by stating that except as provided in Section 41-5-7 NMSA 1978 , Section 1,Subsection H, now will read “payments made from the fund for medical care and related benefits shall be made as expenses are incurred”.
New language in Section 41-5-7 NMSA 1978  Subsection F now states  In a malpractice claim in which punitive damages are awarded, the court shall divide the punitive damage award and enter judgment as follows: (1)  twenty-five percent of the punitive damage awarded to the prevailing party; and (2)  seventy-five percent of the punitive damage award shall be awarded to the state.  All amounts awarded to the state shall be remitted to the state treasurer to be deposited into the patient safety improvement fund.
A new Section 3 of the Medical Malpractice Act refers to limitations on attorney fees will now read: “An attorney shall not contract for or collect a contingency fee for representing a person seeking damages in a malpractice claim in an amount that exceeds: A.  twenty-five percent of the dollar amount recovered, if the recovery is pursuant to a settlement agreement and release of all claims executed by all parties prior to the start of a trial or an arbitration proceeding; or B.  thirty-three percent of the dollar amount recovered, if the recovery is pursuant to settlement, arbitration or judgment that occurs after a trial or arbitration proceeding begins." 
A new Section 4 of the Medical Malpractice Fund will now read: “A.  The "patient safety improvement fund" is created in the state treasury and shall be administered by the department of health.  The patient safety improvement fund consists of distributions, appropriations, gifts, grants, donations and receipts from punitive damage awards in medical malpractice claims.  Money in the patient safety improvement fund shall be invested by the state treasurer, and income from investment of the patient safety improvement fund shall be credited to the patient safety improvement fund.  Money in the patient safety improvement fund shall be expended only as provided in this Pection. 
B.  Money in the patient safety improvement fund is subject to appropriation by the legislature to the department of health for the purposes of improving patient safety and health care outcomes.  All payments made from the patient safety improvement fund shall be made by warrant of the secretary of finance and administration pursuant to vouchers signed by the secretary of health or the secretary's authorized representative.  Any unexpended or unencumbered balance remaining in the patient safety improvement fund at the end of a fiscal year shall not revert but shall remain to the credit of the patient safety improvement fund."