Dec. 28--Physicians have asked a Lea County district judge to overturn a state insurance superintendent's ruling that they say would open their practices to unlimited medical malpractice awards.

Attorneys representing several physicians' group practices and the New Mexico Medical Society warned that even though the ruling retains protection for individual physicians under the 1977 Medical Malpractice Act, the corporations and limited liability companies medical providers organize for their practices would lose the act's protection if Superintendent Morris Chavez's ruling stands.

That would allow plaintiffs to sue for larger malpractice awards than the act allows by naming the practice in lawsuits in addition to the individual physician accused of malpractice, according to documents filed with the court.

Chavez wrote to medical practices and malpractice insurers last October that the 1977 act says only licensed or certified health care providers are protected by the act. Physicians and other practitioners are licensed or certified, but the business entities they form are not, Chavez wrote.

Physicians' attorneys argue that business entities have been included under the act ever since it was passed, that insurance regulators have consistently applied the law to business entities, and that courts and attorneys general opinions over the years have approved of the practice.

The act limits to $600,000 the noneconomic damages that can be paid to a victim of medical malpractice. There is no limit on payment required to care for an injured patient.

Payments to victims are provided by a combination of private insurance purchased by practitioners and a state Insurance Division-administered Patients Compensation Fund that practitioners are required to pay into.

"If a physician-owned corporation cannot be a health care provider as defined in the act" plaintiffs "would simply sue the corporation" to skirt the protections of the act, "creating the very situation that the Legislature sought to avoid," according to documents the physicians filed with the Lea County court.

A virtually identical petition was made by malpractice insurers in a Curry County District Court.

In an interview, Chavez told the Journal that plaintiffs' attorneys have recently challenged the act's application to business entities. "I've had a number of attorneys look at it, a number of insurance brokers, and they all agree corporate entities are not licensed and therefore are not eligible under the act," Chavez said. "The fact we've been doing it for over 20 years: shame on us."

"It's out there," Chavez said. "Lawyers know about this."

The solution is to amend the act to explicitly include business entities, Chavez said, adding that he has asked legislators to draft bills to cover the problem.

"Meanwhile, I can't turn a blind eye to it," he said.

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