Lawsuit claims hospitals are improperly using New Mexico's malpractice fund

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A lawsuit filed by the current and former New Mexico Medical Society presidents accuses the state's Office of Superintendent of Insurance of improperly allowing corporate hospital chains to participate in New Mexico's malpractice fund, according to the Albuquerque Journal.

The lawsuit claims the insurance office and Superintendent John Franchini improperly qualified 16 hospitals and 46 outpatient care facilities to use the fund without disclosing if the organizations would be charged enough to cover the liabilities they bring to the table.

Since the fund is financed through surcharges imposed against physicians based on the risks involved with their specialty, prior to allowing a hospital or outpatient facility access to the fund, the insurance office must assess the risk of each provider. The New Mexico Medical Society presidents argue that the decisions for qualification were made in secret and the surcharge for many of the hospitals have not been undisclosed, according to the report.

A 2016 actuarial study found the Patient Compensation Fund was $36.6 million short of where it should be to remain solvent. 

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