Medical malpractice premiums are not rising equally across states. New Mexico is an outlier because its liability laws expose hospitals and providers to uncapped or loosely constrained damages that equate to far greater and less predictable risk than neighboring states, driving higher premiums and fewer insurance options.
Supporting Hospital Data
New Mexico hospitals are delivering care that meets national quality standards while facing unprecedented malpractice insurance cost increases. This data illustrates that New Mexico’s medical malpractice policies are driving up liability costs and that our state’s hospitals and providers deliver high quality care.
Did You Know?
Total medical malpractice insurance premiums for New Mexico’s hospitals have risen nearly 300% since 2020.
New Mexico’s hospitals provide the same quality care as peer hospitals across the country.
Runaway Malpractice Costs are Straining Hospitals Statewide
Between 2020 and 2025, total malpractice costs for New Mexico hospitals surged by $345 million, an increase of nearly 300% over five years.
The surge in medical malpractice costs over the past five years equates to an average increase of approximately $8 million per hospital. The highest increase totaled almost $68 million over five years at a single hospital.
Cost escalation accelerated dramatically in the past year: Half of New Mexico hospitals experienced at least a 50% increase in total malpractice costs in a single year between 2024 and 2025. One in four hospitals experienced costs that doubled or more than doubled in a single year.
Malpractice costs nearly doubled for New Mexico’s hospitals in 2025.
The Real-World Consequences of Rising Malpractice Costs
- Malpractice costs nearly doubled for New Mexico’s hospitals in 2025.
- This is not an isolated problem — multiple hospitals experienced triple- and quadruple-digit increases; several facilities saw 1000%+ increases in premiums between 2020 and 2025.
- Unchecked malpractice cost growth threatens access to critical services — especially specialty pediatric care and rural hospital services — because these important services serve fewer patients and are likely to operate at a loss already.
- These numbers show the malpractice environment in New Mexico is broken: large, rapid premium spikes create sudden financial stress, forcing hospitals to consider cutting services or limiting care.
- We support targeted reforms that protect patients and restore predictability to the marketplace so hospitals can focus on care, not on crisis-level insurance premiums.
Quality Data Shows Care is Not Why Malpractice Costs are Rising
Note: Independent CMS data shows New Mexico hospitals are performing at or above expected levels, even for high-risk and complex patients. These findings include hospitals with sufficient case volume or applicable services to meet CMS reporting requirements.
Despite the number of malpractice claims, CMS quality and safety measures do not indicate worsening patient outcomes or elevated risk in New Mexico.
Hospital patient safety and quality data show that New Mexico hospitals achieve outcomes that are nearly identical to the national average, even for the most complex cases. This reflects a standard of care comparable to hospitals across the country and refutes claims that New Mexico hospitals are more dangerous.
- Rates for serious hospital complications align with national standards, and when risk factors for New Mexico’s population are taken into account — 7 in 10 New Mexico hospitals perform better than the US standards predicted.
- New Mexico’s mortality rate is within about 2 percentage points of the national average for even the sickest, highest-risk patients, such as those with COPD, heart failure, pneumonia or stroke.
- New Mexico hospitals report lower-than-average rates of MRSA and C. diff infections — two serious infections that can occur during a hospital stay and are largely preventable.
What the Premiums Data Shows — and What It Doesn’t
“These are just outliers — a few hospitals had unusual claims histories.”
While a few hospitals had extreme increases in premiums, the statewide total increased by ~278%. That aggregate figure — not just single cases — shows a systemic problem that needs policy response.
“Premiums rose because claims frequency/severity increased — insurers are simply reacting to more/bigger losses.”
If claims drove all of this, we’d expect the increases to track claims patterns and be gradual. Instead, we see abrupt premium shocks that outpace normal claims growth.
“This is a temporary market condition or national trend — not unique to New Mexico.”
National trends matter, but our data show New Mexico hospitals are experiencing steep, locally-concentrated spikes (e.g., multiple facilities with +500–1,300%). That warrants state-level policy attention to protect access here.
“Reforms (caps, etc.) will harm patients by limiting compensation.”
We support balanced reforms that protect patient rights while restoring market stability so hospitals and providers can maintain and expand access to care. Policy proposals are not suggesting that the amount that patients can be directly compensated for their injuries and losses be reduced or impacted in any way.
New Mexico is Facing a Physician Loss Crisis That No Other Southwestern State is Experiencing
An analysis of Medicare billing data from more than 40 states found that New Mexico is the only Southwestern state to lose practicing physicians since 2019. This divergence from peer states highlights a challenge unique to New Mexico — one that is contributing to longer wait times, fewer specialists, and growing pressure on hospitals statewide.
The data is clear: without targeted action, New Mexico’s access-to-care crisis will deepen.
