OCA outlines spending-target enforcement path: technical assistance, optional public testimony and PIPs; waivers deferred

OCA staff presented a step-by-step enforcement framework for the state's health care cost-growth targets. The process begins with data submission and OCA analysis; if an entity exceeds its applicable target, the office notifies the entity and provides 45 days to submit additional information. OCA will then assess performance and provide mandatory technical assistance letters that outline research, models and tailored descriptive statistics showing drivers of excess spending.

If concerns persist, the director may require optional public testimony from the entity to explain drivers of excess spending; the board and OCA would use that input in deciding whether to require a Performance Improvement Plan (PIP). PIPs would be submitted by entities (45 days to propose, with possible extensions), evaluated by OCA with board input and implemented for up to three years with monitoring and progress reports. OCA compared PIP models in Massachusetts and Oregon (45–90 day proposal windows; 18–24 month implementation in those states) and proposed California's PIP timeframe could extend up to three years with interim reporting.

Staff said OCA would not create a separate statutory waiver process at this time because "reasonable factors" listed in the statute substantially overlap with enforcement considerations OCA will already weigh (anticipated investment costs, extraordinary circumstances, and outside factors). Committee members pressed for transparency, thresholds for selecting entities for PIPs or public testimony, and mechanisms for stakeholder input, including labor representatives, county boards of supervisors and unions when access, workforce and equity concerns are implicated.

OCA said it will consult relevant state regulators before taking enforcement actions that materially affect payers, and will refine regulations this year, with planned board discussion of penalties in April and a regulatory timeline through fall 2026.