In a commentary, California Hospital Association (CHA) argues that the Office of Health Care Affordability's (OHCA) proposed penalties for exceeding its health care spending growth cap would wipe out three years of combined operating earnings for more than 100 California hospitals, about one in four statewide. CHA contends the proposal fails an "affordable, accessible, accountable" test, saying it relies on unvalidated data likely to find over 80% of hospitals noncompliant, does not reduce patient costs, and penalizes hospitals for state-driven cost mandates including wage rules, seismic requirements, and Medi-Cal underpayments. CHA says it submitted a letter to Department of Health Care Access and Information Director Elizabeth Landsberg and will raise these concerns when OHCA's board meets November 18, also noting OHCA loses its emergency rulemaking authority in January.
Why it mattersCalifornia hospitals, including Medi-Cal managed care providers, could face significant financial penalties and potential service cuts if OHCA finalizes the spending growth cap enforcement methodology as proposed.