The Source Blog

On August 10^th, 2026, the California Hospital Association (CHA) filed an Opposition to OHCA's Demurrer to Second Amended Petition for Writ of Mandate. In it, CHA defended its position that both its members, and itself as an organization, have standing in being harmed by the spending targets. CHA refuted California’s Office of Health Care Affordability’s (OHCA’s) claim that harm would not arise until CHA members faced penalties for noncompliance, and that penalties would not be imposed for years later following an enforcement structure. CHA claimed that the enforcement structure was vague, and that the spending targets had impacted current negotiations and agreements with payors, causing CHA members to suffer immediate harm.

CHA also asserted that it has organizational standing under California Medical Assn. v. Aetna Health of California Inc., (2023) 14 Cal.5th 1075, in which the court held that an organization may claim injury for diverting resources if they can show the defendant’s actions threatened the organization’s preexisting mission under Unfair Competition laws. CHA asked the court to apply this holding to FDA v. Alliance for Hippocratic Medicine, (2024) 602 U.S. 367. CHA also introduced a new argument, claiming it and its members had public interest standing because OHCA has a clear statutory responsibility to protect healthcare access while imposing spending targets, and CHA has a strong interest in ensuring the spending targets are set lawfully. CHA claimed that these allegations of concrete harm were enough to satisfy Mandamus because OHCA has a clear duty to consider access, quality, and workforce stability when setting cost targets, and CHA has a beneficial interest in the performance of that duty.

CHA alleged that the spending targets are illegal because OHCA failed to consider public comment while creating them, which was a key component of their legislative responsibility.  CHA responded by affirming its position that OHCA disregarded evidence and public comments warning that the targets would destabilize hospitals, force service cuts, and trigger workforce reductions, and that OHCA offered insufficient guidance on implementation.

A hearing on the demurrer is currently scheduled for September 9, 2026, before Judge Joseph M. Quinn. The Source staff will continue to follow this case.  For more background, please go to our case page.

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