New Mexico Law Allows Texas Physicians to Avoid Lawsuits Across the Border

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Cover Story — June 2016 

Tex Med. 2016;112(6):22-28.

By Joey Berlin

El Paso cardiologist Juan Escobar, MD, has endured one lawsuit in his career. The suit came after the worst of outcomes: the death of an emergency patient from Chaparral, N.M., who had come across the border for care in Texas, as thousands of New Mexicans do every year.  

As is usually the case with a medical liability suit, the patient's family filed it in the same place where the treatment occurred: in El Paso, applying Texas law. Dr. Escobar says it never crossed his mind that care provided in Texas might be open for a lawsuit in New Mexico, where the patient had lived and her family still lived.

"They never took it to anywhere else; it was just El Paso," he said. "I guess the attorney never considered going anywhere else."

That's how interstate care on the West Texas border has always worked: If patients want to sue over treatment they received in Texas, they sue in Texas court. That is, until several plaintiffs sued a bariatric surgeon in New Mexico court for care he performed in Lubbock. One of those cases, Montaño v. Frezza, is now in the hands of the New Mexico Supreme Court, which will look at whether it's proper to apply New Mexico law to the case, as an appeals court ruled earlier. (See "Border Battle," November 2015 Texas Medicine, pages 57-60.)

As West Texas border physicians anxiously follow that case, a new law in New Mexico enables them to avoid facing their own Montaño-like lawsuit. House Bill 270, which New Mexico Gov. Susana Martinez signed in March, allows Texas physicians to draft patient consent forms stating if New Mexico patients wish to file a medical liability suit against Texas physicians, they will do so in Texas courts.

However, HB 270, which takes effect in July, is not retroactive, and West Texas physicians say it doesn't rise to the level of "cure-all."

"This is helpful, but it's not going to resolve the problem of what all occurred in the years before, [nor] is it going to totally resolve the problem of what we do [going] forward," said Allan Haynes Jr., MD, president of the Lubbock-Crosby-Garza County Medical Society. "And we have a huge number of people in that eastern part of the state … who will have a very hard time. This would at least help them some … and while this is not perfect, it's helpful.

"There may still be situations where it could be difficult for patients to receive care or for the physician to feel comfortable proceeding to provide care. And I think that's the frustrating part: It really interferes in your ability to focus on what your job is, which is to take care of patients."

"Twice Bitten"

For decades, Texas physicians have assumed any medical tort suits for treatment taking place in Texas would fall under Texas jurisdiction, with an application of Texas law. But the developments in the Montaño v. Frezza case have challenged that assumption. Plaintiff Kimberly Montaño's 2011 suit against bariatric surgeon Eldo Frezza, MD, was one of five suits plaintiffs brought against Dr. Frezza in New Mexico, even though he performed the procedures in question in Texas. Thus far, courts have sided with Ms. Montaño's argument that New Mexico law applies to the case because her injuries from Dr. Frezza's treatment "manifested themselves in New Mexico." 

The New Mexico Supreme Court will hear oral arguments in Montaño v. Frezza on Aug. 15, 2016. Fearing a precedent that could open the door for other such suits over interstate care, West Texas physicians and other stakeholders sought a preemptive fix through New Mexico's legislature, which met for just 30 days this year.

"We were faced with the prospect that the court could render a decision adverse to our position in the Montaño case. There would be nothing that the legislature could do about it until they met again the following January," said Jon Opelt, executive director of the Texas Alliance for Patient Access (TAPA). "The belief was that an attempt should be made to try to pass a piece of legislation that addresses the issue, and that's what HB 270 does."

In addition to questions of proper venue and law, getting sued in New Mexico for treatment provided in Texas puts physicians at a relative disadvantage. Since the passage of tort reform legislation in Texas in 2003, Texas physicians have enjoyed the protection of a $250,000 cap on noneconomic damages. In New Mexico, the total cap for nonmedical, non-property damages for a government employee is much higher at $400,000; total damages cannot exceed $700,000.

New Mexico's overall cap for all damages due to a medical plaintiff is $600,000, which doesn't include punitive damages and medical expenses. However, that $600,000 cap only applies if a physician belongs to New Mexico's Patient Compensation Fund (PCF), a layer of protection unavailable to physicians practicing solely in Texas. 

Participation in PCF also gives physicians two other major protections: The New Mexico Medical Review Commission would review any claim against the physician before a plaintiff can file the claim in court, and in most cases, a claim brought against the physician would have a three-year statute of limitations.

But physicians without a license to practice in New Mexico aren't eligible for PCF, so a physician who operates solely in Texas doesn't have that option.

"Given the lower court's decision in Montaño, that Texas physician could be twice bitten: They lose the protections that they had in Texas, but they cannot gain the benefits of the compensation fund that's available to their New Mexico colleagues, so they're left in a no-man's land," Mr. Opelt said. "And because physicians are risk-averse, many were reluctant to treat New Mexico patients until there was some type of an understanding that Texas law would govern."

A Three-Year Fix

New Mexico Rep. Terry McMillan, MD (R-Las Cruces), a surgeon, sponsored HB 270, which started as a more ironclad safeguard for Texas physicians than the version that became law.

The first iteration of the bill would have flatly required New Mexicans looking to sue over health care to "bring their claims in the jurisdiction where the services were rendered," according to the stated purpose of the bill. It also would have limited the liability of practitioners outside New Mexico to the laws of the state in which the treatment occurred.

Ultimately, stakeholders, the legislature, and the governor settled on a measure that allows Texas physicians to present a consent form to patients, who would agree by signature that any suit they may file over their care would be in Texas. HB 270 has a three-year shelf life, taking effect on July 1, 2016, and expiring on the same date in 2019, unless the legislature acts again.

The original version of the bill passed the New Mexico House of Representatives 34-27 but then became stuck in a Senate committee. The compromise bill passed the Senate committee and the full New Mexico Senate unanimously.

"This bill came at the very end of the session and was sort of put in there to try to at least get something for Texas doctors," said Dallas attorney Brent Cooper. "And if Texas doctors follow what is prescribed by the bill, they should be adequately protected. But they are going to have to put certain provisions in their intake forms for their patients in order to receive protections from this bill."

The language of the bill offers no specific verbiage or guidance for standardizing a patient consent form. TAPA has drafted a suggested "Choice of Law and Forum Clause" for physicians to include in patient consent for voluntary care. (See "Potential Consent Form Language.")

Lukewarm Reception

Dr. Escobar, a past president of the El Paso County Medical Society, praised New Mexico lawmakers for taking action over the issues Montaño raises.

"We're encouraged that the New Mexico Legislature and the governor … saw that there was a clear damage that was going to be done to patients if the [Supreme] Court ruled not in our favor," Dr. Escobar said, "because we would basically have to decide if we would be willing to see patients from New Mexico. And would we be taking emergencies from New Mexico, because we have a lot of transfers from cities that come by helicopter to our hospitals here, and those are clearly types of patients who are more of a liability risk in terms of getting sued.

"I think that the statistics showed and the inquests from the physicians showed that there was a great concern about taking care of patients from New Mexico, so they acted."

But the bill's three-year expiration date and its lack of specific language for patient consent forms have West Texas physicians less than thrilled. El Paso obstetrician-gynecologist Angel Rios, MD, says HB 270 represents a temporary solution and "creates a very uncertain environment."

"The trouble is that a doctor has to go through his own lawyer and make their own agreement," Dr. Rios said. "But you also make it very controversial from the point [of view] of lawyers because now you have 2,000 doctors on the border of New Mexico providing care, each one with a different agreement, so that agreement becomes very easy to debate in the courts."

In 2013, more than 5,700 hospitalizations from Doña Ana County in New Mexico occurred in Texas, representing nearly 25 percent of combined Texas and New Mexico hospitalizations from that county. (See "Cross-Border Care.") Dr. Rios estimates half of patients in Las Cruces, a city of about 100,000 in Doña Ana County, come across the border for care.

"Then there's another bunch of small towns — like Anthony, Chaparral, and Sunland Park — that literally are 10 miles from the hospital for my services," he said. "And the closest hospital in New Mexico is almost 80 miles away. They're always going to come to Texas to get care."

As for his own patient consent form, Dr. Rios says he's working on one.

"I looked at the [new] law and made an agreement myself and gave it to my lawyer to proofread and redact and make any changes that he [thought were] pertinent," Dr. Rios said. "He called me back and told me that he had the same issues, that it's a temporary solution. It only covers you for [three] years … and then you are back to square one."

Mr. Opelt, however, says he doesn't see 2019 bringing the end of what HB 270 legislates.

"The legislature passed this bill at the urging of their constituents," he said. "I don't see lawmakers reversing their position when this matter comes up for sunset review three years from now. Denying patients access to care doesn't make political sense."

Dr. Haynes, who grew up in Clovis, N.M., along the state's eastern border and practiced in New Mexico for 26 years, says patients have come to West Texas for years because of the shorter distance for care. He anticipates more will do so over time. Clovis, located in Curry County, is about 100 miles northwest of Lubbock but about 220 miles from Albuquerque. In 2013, 26.87 percent of Curry County's hospitalizations were on the east side of the border.

"We care for many of those patients regardless of their income, and we do much charity care over there. I know New Mexico from living there all my life, and they cannot care for those patients in eastern New Mexico," Dr. Haynes said. "It would be extremely difficult for Albuquerque [practitioners] to pick up and provide the care needed there. They just don't have the manpower."

Waiting on Montaño

Ultimately, even as Texas physicians prepare to exercise their new ability to protect themselves from suit in New Mexico, they're keeping one eye on what the neighboring Supreme Court does in the Montaño case.

A ruling upholding New Mexico as the proper venue for jurisdiction and choice of law in that case would make HB 270 "more important than ever," Mr. Cooper says. But HB 270 doesn't have any impact on retroactive cases like Montaño, in which the plaintiff sued Dr. Frezza in 2011, seven years after he performed bariatric surgery on her.

Joanna Harkey, an attorney for Texas Tech University System, praised New Mexico lawmakers for coming up with the compromise measure. Ms. Montaño and the other plaintiffs who sued Dr. Frezza did so for care he provided while he was an employee of Texas Tech University Health Sciences Center.

"For compromise legislation, it gave us something," she said. "What I would prefer is legislation … that says basically if an out-of-state physician not licensed in New Mexico treats a New Mexico patient in the other state, there is no jurisdiction in New Mexico for any cause of action arising from that treatment."

Mr. Opelt says he hopes the bill's "clear and unanimous expression of legislative intent" would resonate with the Supreme Court. Dr. Haynes echoes a similar sentiment, saying he hopes "this unique foray into unknown law can be terminated before its ugly head gets totally reared."

"It's nice to have this [bill], but what is going to be most nice is if the courts will truly recognize that this is not good process," Dr. Haynes said. "It has never been done before, that actions in one state can be sued in another state under another [state's law] such as this. Hopefully, the Supreme Court will read through that and realize that this is not an appropriate state action by them."

Dr. Escobar says physicians should not "fall asleep at the switch."

"[We] just have to stay vigilant because these trial attorneys, they're basically looking for any possible way of circumventing the tort reform that we have here in Texas, which is very favorable to physicians," he said. "They're trying to increase our caps; they're trying to just do anything to undermine that tort reform because it's been so successful at lowering our premiums and decreasing the amount of lawsuits. They're looking for creative ways of suing the doctors and winning higher damages and judgments against us. We'll always be vigilant, and we just can't let our guard down."

Joey Berlin can be reached by phone at (800) 880-1300, ext. 1393, or (512) 370-1393; by fax at (512) 370-1629; or by email.


Potential Consent Form Language

New Mexico's House Bill 270 allows Texas physicians to obtain a signed agreement from New Mexico patients stating that should they wish to file a lawsuit they will do so in Texas court. To assist physicians in taking advantage of the law, the Texas Alliance for Patient Access has developed two forms, one for emergency treatments and one for nonemergency treatment. In consultation with their attorneys, physicians should consider adopting this language in the practice forms patients sign. 

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Last Updated On

December 27, 2017

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Joey Berlin

Associate Editor

(512) 370-1393

Joey Berlin is associate editor of Texas Medicine. His previous work includes stints as a reporter and editor for various newspapers and publishing companies, and he’s covered everything from hard news to sports to workers’ compensation. Joey grew up in the Kansas City area and attended the University of Kansas. He lives in Austin.

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