2026 Legislature Update

Solving the Crisis

Think New Mexico, an independent, not-for-profit think tank, has proposed recommendations to alleviate the healthcare worker

The Think New Mexico report is based on solid research. It offers data-driven solutions, avoids blame, and lays out a plan to strengthen New Mexico’s healthcare workforce. Strengthening our workforce will improve access to care for all New Mexicans. Patients Primero supports the ten-point plan and urges you to read more: Think New Mexico Healthcare Professional Shortage Report.

The 2026 Legislative Session included extensive discussion and debate about the healthcare shortage and steps needed to improve access for all New Mexicans. Below is a recap of the goals outlined in the Think New Mexico report, along with legislative actions that were considered, passed, or postponed.

Reform the Medical Malpractice Act – Update

During the 2026 Legislative Session, medical malpractice was debated at length in committees and on the floor. With the Governor’s support, progress was made through the passage of House Bill 99 (HB99). Below is an update on the stated goals and actions taken:

Balance the needs of patients and providers
Cap attorney fees
- A bill was introduced to accomplish this goal, but capping attorney fees was not included in HB99.
End lump-sum payments and return to a pay-as-you-go system
- HB99 ended lump-sum payments for estimated future medical care and returned to the pre-2021 system, requiring payments to be made by the Patient Compensation Fund (PCF) as expenses are incurred.
- It also repeals a provision allowing settlements that limit a plaintiff’s right to future medical care.
Stop venue shopping
- Restrictions were not included in HB99 but are expected to be introduced in a future session.
Raise the legal standard for punitive damages and cap them
- HB99 raised the standard from “preponderance of the evidence” to “clear and convincing evidence,” aligning with 32 other states.
- Judicial review is now required before punitive damage claims can proceed.
- Plaintiffs must amend their complaint after substantial discovery and provide sufficient evidence to pursue punitive damages.
- Additional discovery may be allowed at the court’s discretion.
- A tiered cap system was established:
  - $1 million for independent providers
  - $6 million for locally owned hospitals
  - $15 million for large systems
  - Caps are adjusted annually based on the Consumer Price Index (CPI).
Prohibit multiple lawsuits for a single malpractice incident
- HB99 redefines “occurrence” as injuries caused by providers during treatment that collectively form a malpractice claim.
- A single occurrence is not multiplied by the number of providers involved.
- However, recovery is not limited if multiple distinct injuries occur.
Ensure damages reflect actual medical costs
- HB99 requires that medical costs be calculated based on the actual amount paid or owed, not billed amounts.
- Costs that are waived or written off are excluded.

What Impact Is Anticipated?

The Office of Superintendent of Insurance (OSI) anticipates that medical malpractice premiums will decrease following HB99. Estimated impacts include:

18.5% reduction from reforms related to occurrence definitions and cost calculations
6% decrease in primary-layer insurance premiums
16% reduction in Patient Compensation Fund (PCF) surcharges

Medical malpractice does occur, and patients should be made whole. These reforms aim to balance the system and help New Mexico compete with other states to attract and retain healthcare providers. However, excessive litigation—often driven by out-of-state attorneys—continues to strain access to care.

The Goals of Proposed Reform of Medical Malpractice

Achieve balance between patients, providers, and legal professionals
Protect patients who have been harmed, ensuring they receive the largest portion of any judgment or settlement
Create an environment that supports independent healthcare providers
Allow attorneys to conduct a viable practice without putting injured patients at risk
Increase and protect everyone’s access to healthcare
Begin to address barriers to physician recruitment and retention
Ensure a sustainable healthcare system for the people of New Mexico

Join the Ten Major Interstate Compacts

Allow qualified out-of-state professionals to work in New Mexico.
Two interstate compacts became law:
- The Interstate Medical Licensure Compact (SB 1)
- The Social Work Licensure Interstate Compact (HB 50), which will make it easier for out-of-state doctors and social workers to serve New Mexicans
Despite the introduction of several bills to join other interstate compacts, they did not make it out of committee.
Eight other compacts had been quickly and unanimously approved in the House but stalled in the Senate, including:
- Physician assistants
- Audiologists and speech-language pathologists
- Physical and occupational therapists
- Dentists and dental hygienists
- Emergency medical services personnel
- Counselors
- Psychologists

Improve Tax Policies

Repeal the Gross Receipts Tax on medical services and expand rural incentives.
The Gross Receipts Tax repeal did not pass. However, a Physician Tax Credit (SB 12) provides a $10,000 income tax credit, which begins January 1, 2027, and ends January 1, 2032, for physicians licensed in New Mexico who provide at least 1,584 hours of healthcare services in New Mexico during the taxable year.

Improve Medicaid Reimbursement

Increase reimbursement rates and ensure fair payment for care.
In 2025, the state established the permanent Medicaid Trust Fund. Once the fund reaches its $2 billion goal, it will generate $100 million annually in recurring funding for Medicaid, which will be matched 3:1 with federal dollars, for a total of $400 million per year for Medicaid.
In the 2026 session, Senate Bill 9 proposed adding $1 billion to the Medicaid Trust Fund. Unfortunately, additional funding for the Medicaid Trust Fund was not ultimately included in this year’s final budget.

Centralized Credentialing

Eliminate the duplication and redundancy of credentialing healthcare professionals.

Expand Student Loan Repayment Programs

Provide adequate funding to qualified applicants with service requirements.

Health Care Professional Loan Fund Changes (HB 66) increase healthcare professional loan repayment.
- It requires recipients to be health professionals who maintain practice in New Mexico or agree to relocate and commence practice in the state.
- It allows fees to be assessed if the recipient breaches their contract to remain in New Mexico.
- The bill prioritizes physicians by committing 50% of the funds to physicians.
- Qualified licensed physicians can receive a yearly award of $75,000 for four consecutive years for loan repayment, for a total of $300,000. This is up from $25,000 per year for three consecutive years, or $75,000 total.
- It provides a recruitment incentive for out-of-state practitioners, allowing candidates to receive loan repayment assistance by agreeing to relocate to New Mexico.
- Other healthcare professionals receive lower repayment amounts, tied to their student debt loads, for a three-year period of service in the state.
- Part-time employment as a licensed physician is prorated based on the percentage of hours worked relative to full-time employment.

License International Medical Graduates

Tap into global talent to meet local healthcare needs.
House Bill 127 was introduced, which would have created a pathway to licensure for qualified physicians who were trained in other countries.
Currently, most doctors educated outside the U.S. are required to complete a U.S.-based medical residency before they can be licensed to practice medicine here, even if they have practiced abroad for many years.
The bill passed the House unanimously but unfortunately died while awaiting a hearing on the Senate floor in the final hours of the session.

Create a Permanent Workforce Fund – Established in 2025

Sustain long-term reforms without raising taxes.

Invest in High School Career Pathways

Introduce students to healthcare careers in which they can earn credentials prior to graduation.

Support Clinical Faculty and Preceptors

Expand higher education capacity by paying instructors competitively.
House Bill 90 and Senate Bill 10 would have created new tax credits for healthcare preceptors.
Preceptors are practicing doctors and other healthcare professionals who provide community-based education for doctors, nurses, and others.
This is an essential part of the training process for healthcare professionals.
Currently, New Mexico preceptors donate their time to teach the next generation of healthcare providers. By contrast, a growing number of states provide tax credits to preceptors to offer some compensation for their teaching time.
These bills were postponed indefinitely. However, the budget (HB 2) did include $3 million to recruit, train, and provide stipends to medical and behavioral health preceptors in medically underserved areas.

In addition, Senate Bill 5 (SB 5) expands certain healthcare residencies and appropriates $3 million from the general fund to the University of New Mexico’s (UNM) Graduate Medical Education (GME) program to assist hospitals in developing and expanding physician residencies in family practice, internal medicine, obstetrics, gynecology, and pediatrics in medically underserved rural areas of the state.