Frequently Asked Questions
Q: What is the Patient’s Compensation Fund?
A: The Patient’s Compensation Fund (“PCF”), which was established by the New Mexico Medical Malpractice Act of 1976, provides an excess layer of professional liability coverage for its member healthcare providers.
Q: What are the benefits to healthcare providers for being in the PCF?
A: There are three main benefits:
- Awards are capped at $600,000, except for medical care and punitive damages, which are not capped.
- All malpractice claims against healthcare providers in the PCF must first be reviewed by the New Mexico Medical Review Commission before they can be filed in court.
- There’s a three-year statute of limitations for claims brought against healthcare providers in the PCF. The only exception is that minors under the age of six have until their ninth birthday to file a claim.
Q: Who runs the PCF?
A: The PCF is administered by the Superintendent of Insurance.
Q: Who funds the PCF?
A: The PCF is funded solely through surcharges (i.e. premiums) levied against its member healthcare providers.
Q: Who determines the surcharges?
A: The Superintendent periodically promulgates the surcharges for doctors and other individual practitioners. The current surcharges went into effect October 2009 via Insurance Bulletin 2009-007. The surcharges for hospitals are determined on a case-by-case basis.
Q: Is the PCF solvent?
A: The latest actuarial study, which evaluated the PCF as of 12/31/11, estimated it to be solvent.
Q: What kinds of healthcare providers are covered under the PCF?
A: Doctors, chiropractors, podiatrists, nurse anesthetists, physician’s assistants, hospitals and outpatient healthcare facilities are eligible to be in the PCF. We currently have about 1800 doctors (including doctors’ business entities), one hospital, and a small number of podiatrists, chiropractors and physician’s assistants in the PCF.
Q: Can nurses, midwives, dentists or nursing homes be in the PCF?
A: No. Only the types of healthcare providers listed in the previous question can get into the PCF.
Q: If a hospital is in the PCF, are its employees covered?
A: This is uncertain and may depend on court interpretations of the Medical Malpractice Act.
Q: How can a doctor or other individual practitioner get into the PCF?
A: He or she must first obtain a primary layer of professional liability coverage from an authorized (i.e. fully licensed) insurer. That coverage must be written on an occurrence (not a claims-made) policy form and must provide $200,000 of coverage per occurrence. For doctors and other individual practitioners, that primary coverage must provide for up to three claims (i.e. a $600,000 aggregate limit) per policy year.
Q. If a doctor chooses not to participate in the PCF, are his Medical Malpractice awards still capped at $600,000?
A. No. The awards are capped only if the provider belongs to the PCF.
Q: How can a hospital or outpatient healthcare facility get into the PCF?
A: It must find an authorized insurer that will provide the primary layer of coverage on an occurrence (not a claims-made) policy. It must also fill out a detailed application and hire an actuary to estimate its future losses that the PCF would have to cover. For hospitals and other facilities, the Superintendent determines, on a case-by-case basis, the maximum number of claims that will be covered per policy year.
Q: Do many carriers actively write the required primary policies for providers in the PCF?
A: No. The Doctor’s Company writes most of the doctors in the PCF, while Medical Protective Company, National Union Fire Insurance Company of Pittsburg, and a few other carriers write the remainder of PCF members.
Q: Can surplus lines insurers provide the primary layer of coverage?
Q: Can risk retention groups provide the primary layer of coverage?
A: According to federal law, yes. There is currently one risk retention group providing primary coverage in the PCF.
Q: Does the PCF provide a separate insurance policy?
A: No. The PCF does not issue its own policy form, but follows the coverage provisions and rules contained in the healthcare provider’s primary policy.