Doctors tell tax panel malpractice, low Medicaid pay and GRT are driving physicians from New Mexico

Four physicians from Dona Ana County told the Revenue Stabilization & Tax Policy Commission in Santa Fe on Thursday that a combination of malpractice risk, the state's gross receipts tax on health services and low Medicaid reimbursement are forcing many doctors out of New Mexico and eroding access to care in communities such as Las Cruces.

"We have to eliminate complacency and outcompete surrounding states in physician recruiting and retention," said Arthur Bergson, a family physician and president of the Dona Ana County Medical Association, who described an "Exodus pyramid" that puts malpractice and the gross receipts tax at the top of the problem list. Bergson said New Mexico had 267 physician openings reported to New Mexico Health Resources and estimated the state could be short about 2,000 primary care doctors by 2030.

The panelists offered concrete policy options. Luke Malawal, a cardiologist and founder of Southwestern Cardiac Arrhythmia Institute, outlined malpractice reforms including raising the burden of proof for punitive damages, restricting venue shopping, preventing "stacking" of multiple suits for a single incident, directing a large share of punitive awards to a patient-safety fund, capping attorney fees, restoring pre-2021 patient compensation fund payments (to pay medical expenses as incurred), and enacting an apology law to make apologies inadmissible in court.

"Our punitive damages are unlimited and uninsurable," Malawal said, arguing those factors pressure providers to settle and raise insurance costs.

Panelists also pressed for tax relief. "We are one of two states that has a gross receipts tax on health care," Bergson said, adding that eliminating GRT on medical services would align New Mexico with other states and reduce administrative burden for practices that operate across state lines.

Jana Williams, a pediatrician who runs private practices in Las Cruces, described training and practice costs, citing typical medical-school debt ranges and examples of malpractice premiums that doubled for some providers between 2020 and 2025. She detailed how billing complexity and insurance denials add staff time and overhead to small practices.

John Endozzo, chief medical officer at La Clinica de Familia, stressed community impacts: when specialists are unavailable locally, patients travel out of state or use emergency departments for primary care needs, raising costs and worsening outcomes. Endozzo cited national and state studies estimating each physician supports jobs and generates significant local economic activity.

Lawmakers pressed for more analysis and stakeholder input. Representative Chandler asked for hospital and trade-association perspectives before drafting legislation, and others warned that removing GRT would create budget gaps local governments would need to replace. Senator Figueroa said a coinsurance exemption proposal previously vetoed would cost roughly $50 million and invited colleagues to work on funding offsets.

The committee did not vote on any new legislation Thursday, though several members discussed directing bill drafters to develop measures based on the panel's proposals. The panelists recommended that bills be considered in their relevant committees (judiciary for malpractice reforms, tax for GRT changes, and appropriations or finance for Medicaid funding changes).

The commission recessed for the day and scheduled continued discussion of tax-package items and GRT proposals for the next morning.