California Health Care Quality and Affordability Act.
Existing law generally requires the State Department of Public Health to license, inspect, and regulate health facilities, including hospitals. Existing law requires health facilities to meet specified cost and disclosure requirements, including maintaining an understandable written policy regarding discount payments and charity.
Existing law establishes the Office of Statewide Health Planning and Development (OSHPD) to oversee various aspects of the health care market, including oversight of hospital facilities and community benefit plans.
Existing law, the Knox-Keene Health Care Service Plan Act of 1975, provides for the licensure and regulation of health care service plans by the Department of Managed Health Care. Existing law also provides for the regulation of health insurers by the Department of Insurance. Existing law requires each department to develop and adopt regulations to ensure that enrollees and insureds have access to needed health care services in a timely manner.
This bill would establish, within OSHPD, the Office of Health Care Affordability to analyze the health care market for cost trends and drivers of spending, develop data-informed policies for lowering health care costs for consumers, set and enforce cost targets, and create a state strategy for controlling the cost of health care and ensuring affordability for consumers and purchasers. The bill would also establish the Health Care Affordability Advisory Board, composed of 9 members and 2 ex officio members, appointed as prescribed, to recommend health care cost targets and to advise the Director of Statewide Health Planning and Development and the office.
The bill would require the director to establish a statewide health care cost target for total health care expenditures and specific targets by health care sector and geographic region. The bill would authorize the office to take progressive actions against health care entities for failing to meet the cost targets, including corrective action plans and escalating administrative penalties. The bill would establish the Health Care Affordability Fund for the purpose of receiving and, upon appropriation by the Legislature, expending revenues collected pursuant to the provisions of the bill.
The bill would require the office to set priority standards for various health care metrics, including health care quality and equity, alternative payment methods, primary care and behavioral health investments, and health care workforce stability. The bill would require the office to gather data and present a report on baseline health care spending trends and underlying factors on or before June 1, 2024. On or before June 1, 2025, the bill would require the office to prepare and publish annual reports concerning health care spending trends and underlying factors, along with policy recommendations to control costs and the other stated metrics.
The bill would require the office to monitor cost trends in the health care market and to examine health care mergers, acquisitions, corporate affiliations, or other transactions that entail material changes to ownership, operations, or governance of health care service plans, insurers, hospitals or hospital systems, physician organizations, pharmacy benefit managers, and other health care entities. The bill would require the health care entities to provide the office with written notice, as specified, of agreements and transactions that would sell, transfer, lease, exchange, option, encumber, convey, or otherwise dispose of a material amount of assets, or that would transfer control, responsibility, or governance of a material amount of the assets or operations to one or more entities. The bill would require the office to conduct a cost and market impact review, as specified, if it finds that the change is likely to have a significant impact on market competition, the state’s ability to meet cost targets, or costs for purchasers and consumers. The bill would prohibit an agreement or transaction for which a cost and market impact review proceeds to be implemented without a written waiver from the office or until 30 days after the office issues its final report. The bill would require the health care entity to pay specified costs associated with that review and completing the report.
Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.
This bill would make legislative findings to that effect.
This bill would declare that its provisions are severable.