The proposed legislation, known as the "Rural Hospital Malpractice Liability Insurance Act," aims to support rural hospitals in New Mexico by creating a grant program to cover the costs of medical malpractice liability insurance premiums. The act establishes the "rural hospital malpractice liability insurance fund," which will be administered by the Department of Health and will consist of various sources of revenue, including appropriations and donations. Rural hospitals can apply for premium grants, provided they meet specific eligibility criteria, such as demonstrating coverage by an approved malpractice insurance policy and maintaining operations in health care underserved areas.

Additionally, the Department of Health is tasked with developing rules for the grant application process, eligibility criteria, and reporting requirements for hospitals receiving grants. An annual report will be submitted to legislative committees detailing the hospitals that received grants, the total funds distributed, and an analysis of the grants' impact on the hospitals' financial stability and health care services. The bill includes an appropriation of $66 million from the general fund to support the initiative, with the intent for the act to take effect immediately to address urgent health care needs in rural areas.