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Senate Judiciary hears detailed briefing on Patient Compensation Fund deficits, hospital surcharges and insurer defense costs
Summary
Presenters told the Senate Judiciary Committee that the Patient Compensation Fund (PCF) has been strained by flat surcharges, hospitals admitted without independent risk assessments, and high defense costs; panelists urged stronger actuarial practice, investment governance and targeted surcharges.
Theresa Hassy, an Albuquerque attorney who represents patients in malpractice cases, told the Senate Judiciary Committee the Patient Compensation Fund was created by the New Mexico Medical Malpractice Act in 1976 as a state-sponsored backstop when private malpractice insurance was scarce. She said the fund’s revenue comes from surcharges on providers and that prior management left surcharges flat for years despite actuarial recommendations, eroding reserves.
“The strategy that the superintendent did at that time was to use today’s premiums to pay yesterday’s claims,” Hassy said, describing a practice the 2017 state auditor criticized. She warned that when reserves fall short, future surcharges must rise or taxpayers may be…
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