Smaller New Mexico hospitals will soon start missing out on government funding due to their fewer number of beds and smaller financial performance.
Senate Bill 17 signed into law earlier this year is set to go into effect this summer, redefining how the state calculates its portion of the Medicaid match for hospitals. The Healthcare Quality Delivery and Access Act establishes that 60% of the state’s match is based on “Medicaid service volume” or beds while 40% is based on performance, which is determined by the Health Care Authority based on reports from the hospitals.
“Ultimately, the bill aims to improve and increase access to healthcare services within the state. However, hospitals that do not have significant Medicaid service volume will not see much benefit,” reads a Legislative Finance Committee report.
According to the report, smaller hospitals with fewer beds care for fewer Medicaid patients, compared to bigger hospitals with a larger capacity to treat Medicaid patients.
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“Given the structure of the act, hospitals most at risk of down-sizing may not see much benefit. Generally speaking, hospitals that are not fiscally-challenged will receive the bulk of the financial aid based on bed count,” the report reads. “Ultimately, the act does not target hospitals that are financially struggling, and instead helps larger hospitals which are generally already profitable.”
The LFC report uses Rehoboth McKinley Christian Hospital in Gallup as an example. The smaller hospital lost around $20 million in 2022 and will receive about $6.5 million from the new law.
Rehoboth has made headlines recently by being ordered to pay over $100 million in medical malpractice damages. The civil case was filed in 2019 following a patient’s botched hernia surgery left them with life-long complications.
Gallup hospital says it is ‘indigent’ ahead of court order to find more than $100M
“This will not cover the full extent of the losses that Rehoboth faces and they will still have a negative net margin of more than $13 million,” the LFC report reads.
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On the other hand, the larger Eastern New Mexico Medical Center reported a profit of about $80 million in 2022 and will receive over $37 million from the law. The report said if the Roswell hospital’s earnings remain on track, it could see over $117 million in combined profits and matched funding from the state.
Twelve New Mexico hospitals which qualify for funding under the new law reported net losses in 2022. Four of them will not receive enough state match funding to turn a profit. These include Rehoboth, Presbyterian Hospital in Albuquerque, Santa Fe Medical Center, and Encompass Health Rehabilitation Hospital of Albuquerque.
In Southern New Mexico, Artesia General Hospital reported a nearly $3 million loss in 2022 and is only projected to receive $5.6 million in match funding. The hospital will be profitable at $2.7 million, which is low compared to other larger hospitals in the region.
The report also noted that public funds made up about 70% of total hospital revenue in 2022 and this number is projected to reach 74% by 2025. These include funding from Medicaid, Medicare, Medicare Advantage and state subsidies.
“As the state continues to increase hospital subsidies, New Mexico is in a unique position to ensure hospitals use their revenue to improve patients’ outcomes and access to healthcare,” the report reads.
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During a Legislative Health & Human Services Committee meeting this week, Rep. Tara Lujan (D-Santa Fe) said the report raised several “red flags” for the lawmakers.
“We don’t always have all the answers when we come up with legislation. But I knew that we worked together with institutions, with legislators, with the executive office particularly on this bill,” Lujan said. “It looks like we need to make some adjustments.”
When asked by Rep. Pamelya Herndon (D-Albuquerque) about solutions the legislature should consider, LFC Analyst Allegra Hernandez said lawmakers need to make sure there are measures in place to hold hospitals accountable, and to improve care.
She added that the goal should be to make sure New Mexico hospitals are in a financially “healthier place” in five years, and that she does not believe Senate Bill 17, as it is currently written, will do that.
Hernandez offered one solution – the rural emergency hospital designation through Medicare. This designation was established through the Consolidated Appropriations Act of 2021 by Congress. The idea is that smaller, often rural hospitals would transition to become a rural emergency hospital and only offer emergency care to patients. This would limit access to broader services for patients seeking care.
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“The rural emergency designation possible by (Medicare) is one potential answer, although it’s not necessarily the most popular answer as it would close hospital beds and only allow for emergency services,” Hernandez said.
Hospitals that choose to transition to this designation would receive another 5% in Medicare funds and a monthly facility payment of about $272,000. According to the LFC report, Guadalupe County Hospital is the only hospital in the state that has chosen to make this transition.
“The state and hospitals will likely need to continue to make difficult decisions about when it is necessary to close hospitals or sections of hospitals,” Hernandez said. “(The rural emergency designation) is an option, although, as I said, it is controversial,” Hernandez said.
NM FAST (New Mexico Federal and State Technology) is now accepting applications for a free space-sector accelerator cohort designed to help New Mexico-based technology companies compete for federal funding through the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. The cohort targets founders and researchers pursuing grants from NASA, Space Force and related federal agencies, with programming set to launch July 21.
The cohort will admit six to 10 New Mexico companies and run for 10 to 12 weeks, meeting in weekly sessions of approximately one and a half to two hours. Programming covers the full arc of federal commercialization strategy, including space-sector SBIR/STTR opportunities and federal funding pathways, proposal development for technical narratives and commercialization components, federal procurement positioning and agency discovery, capital strategy and follow-on funding options, and transition planning from Phase I to Phase II awards. Participants also receive targeted one-on-one advisory support throughout the program. The cohort is offered at no cost to accepted companies.
The program is open to companies at both the pre-award and early-award stages. The majority of cohort seats are designed for Phase 0 companies preparing to submit Phase I SBIR/STTR applications to NASA or Space Force. A limited number of seats are available for Phase I awardees working toward Phase II readiness and Phase III transition planning.
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“New Mexico has a deep base of research and a growing pipeline of founders ready to translate that work into companies that can compete for federal R&D dollars,” said Carlos Murguia, director of the Technology and Innovation Gateway at Arrowhead Center. “This cohort focuses specifically on the space sector, pairing New Mexico companies with Larta’s expertise in SBIR and STTR commercialization to give founders a clear, structured path from early-stage research to federal award.”
Larta Institute, NM FAST’s commercialization partner for this program, will lead the full design and delivery of the accelerator curriculum. Larta has supported startups that have collectively raised more than $23.7 billion since 1993 and brings that track record to founders working in New Mexico’s growing aerospace and space technology sector.
The cohort aligns with the aerospace priority sector named in the New Mexico Entrepreneurship Programmatic Support Grant and is relevant to companies working at the intersection of advanced computing, bioscience and advanced energy applications in space-related contexts.
NM FAST is administered by Arrowhead Center at New Mexico State University and operates statewide, serving founders in Las Cruces, Albuquerque, Los Alamos and rural communities across New Mexico. Over more than a decade of programming, NM FAST has supported more than 470 New Mexico startups and helped companies secure nearly $28 million in federal SBIR awards. Targeted outreach is directed to rural, women, veteran and minority entrepreneurs.
The program is sponsored by the New Mexico Economic Development Department’s Technology and Innovation Office through the New Mexico Entrepreneurship Programmatic Support Grant, which supports continued statewide programming for SBIR/STTR-eligible companies in the four priority sectors.
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Applications are open now and will be accepted through July 14, 2026. Interested companies can apply at forms.gle/CqSwEL7LahqB5pGu9. Space is limited, and selected companies will be notified before the program launch.
SANTA FE, N.M. – Santa Fe County and Edgewood approved a new agreement and ordinance that secures ongoing fire and EMS services for Edgewood residents.
According to a joint announcement from the Town of Edgewood and Santa Fe County on June 19, the two governments negotiated and adopted a new Joint Powers Agreement and ordinance to keep the Santa Fe County Fire Department serving the town.
County and town representatives drafted the agreement together. The town adopted the ordinance unanimously at a special meeting on June 16, putting an end to weeks of uncertainty.
Santa Fe County District 3 Commissioner Camilla Bustamante said, “I believe we are all relieved to know that the people of Edgewood will continue to have the fire and EMS services necessary to protect their homes, their families, and their community. This community deserves nothing less.”
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The announcement said the ordinance takes effect five days after final publication. The statement also said no further action or approval is needed to guarantee continued fire suppression, fire prevention, and EMS services for Edgewood residents.
Both governments noted the agreement will continue indefinitely unless either side ends it with five years’ notice.
