TITLE 13 INSURANCE
CHAPTER 21 PATIENT’S COMPENSATION FUND
PART 2 QUALIFICATIONS AND ADMISSIONS
13.21.2.1 ISSUING AGENCY: The New Mexico Superintendent of
Insurance.
[13.21.2.1
NMAC –Rp, 13.21.2.1 NMAC, 01/01/2022]
13.21.2.2 SCOPE: The rules in this part govern the qualification
and admission of health care providers to the Patient’s Compensation Fund (the
fund).
[13.21.2.2
NMAC – Rp,13.21.2.2 NMAC, 01/01/2022]
13.21.2.3 STATUTORY AUTHORITY: Section 41-5-25 NMSA 1978.
[13.21.2.3
NMAC – Rp,13.21.2.3 NMAC, 01/01/2022]
13.21.2.4 DURATION: Permanent.
[13.21.2.4
NMAC – Rp,13.21.2.4 NMAC, 01/01/2022]
13.21.2.5 EFFECTIVE DATE: January 1,
2022, unless a later date is cited at the end of a section.
[13.21.2.5
NMAC – Rp,13.21.2.5 NMAC, 01/01/2022]
13.21.2.6 OBJECTIVE: The rules in this part are intended to ensure that health care providers are qualified for
and admitted to the fund on a financially and actuarially sound basis.
[13.21.2.6
NMAC – Rp,13.21.2.6 NMAC, 01/01/2022]
13.21.2.7 DEFINITIONS: This rule adopts the definitions
found in Section 41-5-3 NMSA 1978, in Section 14-4-2 NMSA 1978, in Chapter 59A,
Article 1 NMSA 1978, in 1.24.1.7 NMAC, and in 13.21.1.7 NMAC.
[13.21.2.7
NMAC – Rp,13.21.2.7 NMAC, 01/01/2022]
13.21.2.8 BASIC QUALIFICATIONS FOR
ADMISSION TO THE FUND:
A. To be eligible for
admission to the fund, a person shall:
(1) be a
health care provider, as defined by the MMA or by these rules, who is engaged
in the provision of health care services within the state of New Mexico, and is
not organized solely or primarily for the purpose of qualifying for admission
to the fund;
(2) demonstrate
and maintain, to the satisfaction of and in the manner specified by the
superintendent and in accordance with the standards prescribed by these rules,
or as otherwise provided by law, financial responsibility for, and with respect
to, malpractice or professional liability claims asserted against the person or
institution;
(3) apply
for admission pursuant to these rules; and
(4) pay
the applicable surcharges and assessments to the fund.
B. Part-time
health care providers and locum tenens may be enrolled individually in the
fund, paying their class surcharge on a pro rata basis.
C. An
independent provider that is a business entity, including solo corporations:
(1) must have at least one qualified health care provider as a
member or employee of the entity;
(3) shall pay an applicable business entity surcharge to the
fund.
D. Slot
coverage is not permitted.
E. A
health care provider who is a natural person may be qualified as a member or
employee of more than one business entity, with the appropriate surcharges paid
pro rata. The underlying medical malpractice liability insurance may be
provided by different insurers.
[13.21.2.8
NMAC – Rp,13.21.2.8 NMAC, 01/01/2022]
13.21.2.9 FINANCIAL RESPONSIBILITY --
INSURANCE:
A. To
establish and maintain financial responsibility using insurance, the health
care provider, or authorized representative of the health care provider, shall
submit proof that the health care provider is or will be insured under a policy
of malpractice liability insurance with indemnity limits of $250,000 per
occurrence.
B. To be
acceptable as evidence of malpractice liability insurance, an insurance policy:
(1) shall
be issued by an insurer
licensed and admitted
in New Mexico by the superintendent or by a licensed risk retention group;
(2) shall,
except for a hospital or outpatient health care facility, be on an occurrence
coverage form approved by the superintendent;
(3) if on a claims made form issued to a hospital or
outpatient health care facility, shall be on a claims made form approved by the
superintendent and must include an extended reporting endorsement or equivalent
tail to maintain indefinite coverage;
(4) shall
provide for the insurer's assumption of the defense of any covered claim,
without limitation on the insurer's maximum obligation respecting the cost of
defense;
(5) shall,
for an
independent provider, provide coverage
for not more than three separate occurrences; and
(6) shall
be nonassessable.
C. Admitted
carriers and risk retention groups desiring to provide malpractice liability
insurance policies for the qualification of health care providers under the MMA
must apply for approval from the superintendent by submitting a copy of the
proposed policy forms and proposed rates to the superintendent.
D. The
proof required by Subsection A of this section shall be issued and executed by
an officer or authorized agent of the applicant health care provider's insurer
and shall specifically identify the policyholder, the named insureds under such
policy, the policy period, and the limits of coverage. Upon request by the superintendent or the TPA,
such certification shall be accompanied by a certified true copy of the policy,
or identification of the SERFF numbers of the specific policy form(s)
previously filed with and approved by the superintendent.
E. The
occurrence coverage required by this rule to demonstrate the requisite
financial responsibility for qualification with the fund shall be deemed to be
continuing without a lapse in coverage by the fund, provided that the health
care provider meets the premium payment conditions of the underlying coverage
and timely meets the surcharge payment conditions of these rules, as
applicable.
[13.21.2.9
NMAC – Rp,13.21.2.9 NMAC, 01/01/2022]
13.21.2.10 FINANCIAL RESPONSIBILITY -- SELF-INSURANCE: An independent provider may qualify for
admission to the fund by having
continuously on deposit the sum of $750,000 in cash, as long as the
following conditions are met:
A. The
deposit shall be conditioned only for, dedicated exclusively to, and held in
trust for the benefit and protection of and as security for the prompt payment
of all medical malpractice claims arising or asserted against the health care
provider.
B. A
self-insured health care provider shall be required to execute a pledge
agreement for the money on deposit prescribed and supplied by the
superintendent.
C. Sums
on deposit with the superintendent pursuant to this rule shall not be assigned,
transferred, mortgaged, pledged, hypothecated, or otherwise encumbered by the
health care provider nor shall any such deposit be subject to writ of
attachment, sequestration, or execution except pursuant to a final judgment or
court-approved settlement issued or made in connection with and arising out of
a malpractice claim against the health care provider.
D. To maintain
financial responsibility for continuing qualification with the fund, a
self-insured health care provider shall at all times maintain the sum on
deposit provided for by this rule at not less than $750,000. The value of the health care provider's deposit
shall be deemed impaired when any portion is seized or released pursuant to
judicial process.
E. In
the event that a self-insured health care provider's deposit provided for by
this rule becomes impaired, the superintendent shall give written notice of
such impairment to the self-insured health care provider, and the self-insured
health care provider shall, unless a longer period is provided for by the
superintendent, have five days from receipt of such notice to make such
additional deposit as will restore the minimum deposit value prescribed by this
rule. A self-insured health care
provider's qualification with the fund shall terminate on and as of the later
of the last day set by these rules or, if applicable, by the superintendent, if
the self-insured health care provider has not on or prior to such date restored
the minimum deposit value prescribed by this rule. In the case of multiple self-insured health
care providers approved by the superintendent to post one deposit, as set forth
in Subsection B of this section, the
admission to the fund of each member of the group or each related entity shall
terminate on and as of the last day set by these rules or, if applicable, by
the superintendent, if the self-insured health care provider has not on or
prior to such date restored the minimum deposit value prescribed by this rule.
F. A self-insured health care provider shall, within 120 days of receiving
notice of a request for review of a malpractice claim, submit a report to the
superintendent and the TPA of the anticipated exposure to the fund and the
self-insured health care provider and containing sufficient details supporting
the anticipated exposure. In addition,
said self-insured heath care provider shall provide updates to the
superintendent and the TPA when significant changes in anticipated exposure
occur.
G. A
self-insured health care provider who has evidenced financial responsibility
pursuant to this rule may withdraw the deposit prescribed by this rule upon
authorization of the superintendent. All
money shall remain on deposit and pledged to the fund during the term of the
health care provider's admission as a self-insured health care provider with
the fund and for the longer of a three-year period following termination of
such admission or as long as any medical malpractice claim is pending, whether
with the medical review commission or in a court of competent jurisdiction. After this time period, authorization may be
given when the health care provider files with the superintendent and the TPA,
not less than 30 days prior to the date such withdrawal is to be effected, a
certificate signed by the health care provider, certifying:
(1) the
date the health care provider terminated admission to the fund as a
self-insured health care provider;
(2) that
there are no medical malpractice claims pending with the medical review commission
or in a court of competent jurisdiction;
(3) that
there are no unpaid final judgments or settlements against or made by the
health care provider in connection with or arising out of a malpractice claim;
and
(4) that
there are no unasserted medical malpractice claims which are probable of
assertion against the health care provider.
H. Effective
as of the date on which a self-insured health care provider's deposit is
withdrawn pursuant to this rule, the health care provider's admission to and
qualification with the fund shall be terminated.
I. The deposit with the superintendent
shall provide coverage for not more than three separate occurrences, and the limit
that shall be paid from the deposit for each occurrence is $250,000.
J. The acceptance by the
superintendent of the self-insurance deposit described in this rule does not
create in the superintendent, the TPA, or the fund a duty to defend any health care
provider making a deposit under this rule.
[13.21.2.10
NMAC – Rp,13.21.2.10 NMAC, 01/01/2022]
13.21.2.11 ADDITIONAL QUALIFICATIONS FOR
HOSPITALS AND OUTPATIENT HEALTH CARE FACILITIES:
A. The
superintendent shall perform a risk assessment for each applicant hospital or
outpatient health care facility. If the
hospital or outpatient care facility will establish and maintain financial
responsibility with medical malpractice liability insurance, the superintendent
may consider as the risk assessment the information and documents that the
applicant submitted to its insurer, all of which shall be provided to the
superintendent by, or on behalf of, the applicant, along with all other
information that the superintendent has or requests of the applicant. If the hospital or outpatient care facility
will be self-insured, the risk assessment shall be based on information
requested by the superintendent upon forms prescribed and supplied by the
superintendent. The superintendent may
request and consider any additional information pertinent to a risk assessment.
B. The superintendent shall arrange for an actuarial study
before determining base coverage or deposit and surcharges. If the data
available for a hospital or outpatient health care facility is insufficient for
actuarial analysis, due to sample size or similar inadequacies, the actuarial
study may aggregate data among similar hospitals or outpatient health care
facilities to achieve actuarial significance.
C. Based on the risk assessment and
actuarial study the superintendent shall determine each hospital’s or
outpatient health care facility’s base coverage and coverage terms, or, if
self-insured, the required deposit, pursuant to the procedures of this
section.
D. The risk assessment and actuarial
study for each hospital or outpatient health care facility shall be required
when the hospital or outpatient health care facility applies the first time for
admission to the fund, and may be required at any other time the superintendent
deems it necessary or advisable.
E. A
hospital or outpatient health care facility seeking admission to the fund must
apply by April 1 of the year prior to their first admission to the fund.
[13.21.2.11
NMAC – Rp,13.21.2.11 NMAC, 01/01/2022]
13.21.2.12 CONFIDENTIAL INFORMATION: Information from any health care provider who seeks qualification and
admission to the fund shall be kept confidential pursuant to the requirements
of Subsection D of Section 41-5-25 NMSA 1978.
[13.21.2.12
NMAC – Rp,13.21.2.12 NMAC, 01/01/2022]
13.21.2.13 ADMISSION PROCEDURE:
A. An
application for admission to the fund shall be made to the third-party
administrator through the patient’s compensation fund website, which shall
require the applicant to provide a legal name; professional license, certification,
or registration number; information relating to the nature and scope of the
applicant's practice sufficient to identify the class or category of the
practitioner; information on malpractice claims previously concluded or then
pending against the applicant; and such other information as the superintendent
or the TPA may require.
B. The
application shall be accompanied by evidence of financial responsibility in the
form prescribed by these rules and the applicable surcharge as determined by
the superintendent with the advice of the advisory board.
C. The
advisory board will provide advice to the superintendent and carry out its
additional obligations as set forth in Subsection E of Section 41-5-25.1 NMSA
1978.
D. If
the third-party administrator determines that an applicant does not meet the
qualifications for admission to the fund set forth in the MMA and these rules,
the third-party administrator shall issue a notice to that effect and notify
the applicant within 15 days of receipt of the completed application. The applicant may within 15 days of receipt of
the notice, appeal the determination to the superintendent by delivering a
notice of appeal to the superintendent. The provisions of 13.21.4 NMAC
shall apply to the appeal.
[13.21.2.13
NMAC – Rp,13.21.2.13 NMAC, 01/01/2022]
13.21.2.14 ORDER OF ADMISSION:
A. Periodically,
after health care providers have been approved for admission into the fund, the
TPA shall notify the superintendent, who shall issue an order of admission to
the fund, which shall:
(1) identify
the health care providers who have been admitted;
(2) state
that the health care providers have qualified for admission to the fund pursuant
to Section 41-5-5 NMSA 1978;
(3) specify
the effective date and term of each admission; and
(4) for a hospital or outpatient health
care facility for whom a base coverage or surcharge has been set, the amount of
the base coverage or surcharge.
B. Duplicate
or additional orders of admission shall be available to and upon the request of
a qualified health care provider or the qualified health care provider’s
attorney, or professional liability insurance underwriter, when such
certification is required to evidence admission to or qualification with the
fund in connection with an actual or proposed malpractice claim against the
health care provider.
C. A
copy of each order of admission shall be available for public inspection at the
main office of the superintendent on the day it is issued, and a copy of the
order shall be posted on the patient’s compensation fund website as soon as
practicable. Posting the order on the patient’s compensation fund website shall
constitute delivery to the health care provider and any other interested person.
Any person aggrieved by the admission of any qualified health care provider to
the fund or by the conditions of the health care provider’s admission may,
within 15 days of issuance of the order, appeal the admission to the
superintendent by delivering a notice of appeal to the superintendent. The filing of an appeal shall not operate to
stay the order of admission or suspend the conditions of admission. The
provisions of 13.21.4 NMAC shall apply to the appeal.
[13.21.2.14
NMAC – Rp,13.21.2.14 NMAC, 01/01/2022]
13.21.2.15 EXPIRATION OF ADMISSION AND RENEWAL
OF ADMISSION:
A. Admission
to the fund expires:
(1) as to a health care provider
evidencing financial responsibility other than by self-insurance, on and as of:
(a) the
effective date and time of termination or cancellation of the policy of the
health care provider's malpractice liability coverage; or
(b) the
last day of the applicable period for which the prior annual surcharge applied
in the event that the annual surcharge for renewal coverage is not paid by the
health care provider to the insurer on or before 30 days following the
expiration of the prior admission period.
(2) as to
a self-insured health care provider on and as of:
(a) the
effective date and time of termination, cancellation or impairment of the
health care provider's financial responsibility; or
(b) the
last day of the applicable period for which the prior surcharge applied in the
event that the surcharge for renewal coverage is not paid by the health care provider
to the superintendent on or before 30 days following the expiration of the
prior admission period.
B. Admission
to the fund must be renewed by each qualified health care provider on or before
expiration of the admission period in accordance with these rules.
[13.21.2.15
NMAC – Rp,13.21.2.15 NMAC, 01/01/2022]
13.21.2.16 TERMINATION OF ADMISSION:
A. A
health care provider's admission to the fund shall terminate:
(1) as to
a health care provider evidencing financial responsibility by proof of
insurance pursuant to these rules, on and as of the effective date of
cancellation of the health care provider's insurance coverage;
(2) as to
a self-insured health care provider on and as of any date on which:
(a) the
health care provider ceases to maintain financial responsibility in the amount
and form prescribed by these rules; or
(b) the
health care provider fails, within the allowed time after notice by the TPA, to
provide additional security for financial responsibility when existing
financial responsibility security is impaired as provided in these rules.
(3) on any date that the health care
provider's professional or institutional license, certification, or registration
is suspended or revoked or that the health care provider ceases to be a health
care provider as defined by the MMA or these rules or otherwise ceases to be
eligible for admission to the fund.
B. Upon written notice to a health care
provider, or such provider's authorized representative, the TPA may terminate a
health care provider's admission to the fund, effective 30 days following the
mailing by registered or certified mail, return receipt requested, or giving of
such notice in the event that a qualified health care provider has failed or
refused to timely provide any reports or submit any information or data
required to be reported or submitted by these rules. If, within 30 days of receipt of such a
notice, a health care provider furnishes to the TPA any and all delinquent
reports, information, and data, as specified by such notice, the health care
provider's admission to the fund may be continued in effect, provided that the
health care provider remains otherwise qualified for admission to the fund.
C. If
the TPA terminates a health care provider’s admission to the fund, the TPA shall
notify the provider within 15 days of receipt of the cancellation or
termination. The health care provider
may, within 15 days of receipt of the notice, appeal the determination by delivering
a notice of appeal to the superintendent. The provisions of 13.21.4 NMAC
shall apply to the appeal.
[13.21.2.16
NMAC – Rp,13.21.2.16 NMAC, 01/01/2022]
13.21.2.17 PATIENT’S
COMPENSATION FUND ACTUARY:
A. In accordance with the provisions of
law applicable to contracting for personal, professional, or consulting
services, the superintendent, in consultation with the advisory board, may
employ or hire one or more qualified and competent actuaries to advise and
consult the superintendent, the advisory board, and the TPA on all aspects of
the administration, operation, and defense of the fund which require
application of actuarial science.
B. An actuary may be asked to evaluate
or recommend:
(1) the claims experience data required
for risk assessments;
(2) the establishment, maintenance, and
adjustment of reserves on individual claims against the fund and the
establishment, maintenance, and adjustment of reserves for incurred but not
reported claims;
(3) surcharges, rated and classified
according to the classes or risks against which the fund provides compensation,
that shall reasonably ensure that the fund is sufficiently funded so as to be
and remain financially and actuarially capable of providing the compensation
for which it is organized;
(4) each hospital’s or outpatient health
care facility’s base coverage and coverage terms upon initial admission
into the fund, and whether additional charges need to be made for initial
admission to the fund; and
(5) any other actuarial questions
affecting the administration, operation, and defense of the fund.
[13.21.2.17
NMAC – Rp,13.21.2.17 NMAC, 01/01/2022]
13.21.2.18 ANNUAL ACTUARIAL STUDY:
A. Annually, as required by Section
41-5-25 NMSA 1978, the superintendent shall cause an independent actuary to
perform an actuarial study of the fund, and of the surcharges necessary and
appropriate to ensure that it is and remains financially and actuarially sound.
B. In the performance of the actuarial
study, the independent actuary shall employ sound actuarial principles.
[13.21.2.18
NMAC – Rp,13.21.2.18 NMAC, 01/01/2022]
13.21.2.19 SURCHARGES:
A. For a health care provider other
than a hospital or outpatient care facility, the superintendent, with the
advice of the advisory board, shall determine surcharges based on
classifications and categories of medical malpractice liability risks
underwritten by the fund with respect to practice type or specialties as
determined and specified in the annual actuarial study pursuant to this rule.
B. For a hospital or outpatient care
facility, the superintendent, with the advice of the advisory board, shall
determine surcharges based on the annual actuarial study using the information
specified in Subsection D of Section 41-5-25 NMSA 1978.
[13.21.2.19
NMAC – Rp,13.21.2.19 NMAC, 01/01/2022]
13.21.2.20 PAYMENT OF SURCHARGES:
A. An insured health care provider must
pay the applicable surcharge to the medical malpractice liability insurer
within 30 days of the inception of coverage, and within 30 days of the
inception of each period of renewal coverage.
B. A self-insured health care provider
must pay the applicable surcharge within 30 days of the requested date for
admission into the fund, and within 30 days of the inception of each renewal
period.
[13.21.2.20 NMAC – Rp,13.21.2.20 NMAC, 01/01/2022]
13.21.2.21 ADMISSION DATE:
A. A health care provider who
applied for admission to the fund prior to the effective date of these rules,
and who was approved for admission prior to the effective date of these rules,
shall be admitted to the fund as of the date of the prior application.
B. A health care provider whose first
application for admission to the fund is made after the effective date of these
rules, and who is approved for admission pursuant to these rules, will be
admitted to the fund as of the date of initial application.
C. Under
Sections A and B of this section, the admission date for an insured health care
provider who applies to participate in the fund, and who pays all applicable
surcharges to the fund, within 60 days of the inception of the base coverage, shall
relate back to the inception date of the base coverage.
D. The admission of all health care
providers in the fund as of December 31, 2021 shall expire at the end of
December 31, 2021. The admission of any health care provider renewed or
admitted to the fund on or after January 1, 2022 shall expire at the end of
December 31 of the year of renewal or admission.
[13.21.2.21
NMAC – Rp,13.21.2.21 NMAC, 01/01/2022]
History of
13.21.2 NMAC:
13.21.2
NMAC, Qualifications and Admissions, effective 3/1/2019.
History of Repealed Material:
13.21.2
NMAC, Qualifications and Admissions, filed 3/1/2019 was repealed and replaced
by 13.21.2 NMAC, Qualifications and Admissions, effective 4/30/2019.
13.21.2
NMAC, Qualifications and Admissions, filed 4/30/2019 was repealed and replaced
by 13.21.2 NMAC, Qualifications and Admissions, effective 01/01/2022.